Mar 17 2016

Katrina 10 Years After: Lessons from Credit Unions and Banks

Credit unions experienced costly downtime immediately following Hurricane Katrina.

But how much? Using institutional data and interviews from organizations impacted by Katrina, we compare return on assets (ROA), return on equity (ROE), growth, and membership performance results for credit unions in the aftermath of the storm.

Looking at the performance of these institutions 10 years after the devastation is complicated by a number of local, national, and global events.

Some of these, such as the Great Recession and Bank Transfer Day, are well known. Others were focused more on the local level. Separating these episodes from the policy efforts at the micro level requires good institutional understanding and data.

This research offers lessons to similar institutions that may face catastrophic events. We outline the common characteristics of firms that have been successful in the 10 years since the storm. Katrina has highlighted the need for financial institutions, especially those in vulnerable regions, to consistently update their disaster recovery plans.

Report Number 384