definitionA common way for emerging-economy governments to raise funds after a disaster is to borrow from their central bank reserves or to issue government bonds (Kunreuther H. and Linnerooth-Bayer J., 1999, p.14).
Co-benefits and impactsFinancial preparedness is the major benefit. While the interest on government issued bonds will generally be less than the interest on cat bonds or the premiums on insurance, there are also disadvantages to this form of financing. There may be concerns about transferring the disaster costs in part to future generations who will be burdened by this debt. In addition, issuing bonds or borrowing from central bank reserves will contribute to the budget deficit. This financing instrument may also transfer a part of the burden to the domestic and international investors in these bonds to the extent that the government defaults on its debt. The bond rating will depend on this default risk, which determines the cost to the government of borrowing funds.
(Kunreuther H. and Linnerooth-Bayer J., 1999, p.14)
Approaches (Show all)Accommodation
Scales (Show all)River Basin
Land uses (Show all)Urban
FRI indicators (Show all)Tax deduction to citizens in flooded areas
Availibility of resources for solid waste removal and management
Availability of resources assisting in quicker and more efficient drainage of flooded areas
Availability of financial resources supporting rescue services
Availability of financial resources enabling the development and implementation of evacuation plans before human loss
Assessment of Financial Resources Management and Allocation in relation to past flood events
Availability of financial resources for protection of transportation network
Availability and accessibility of financial resources
Time scales (Show all)Medium term
Measure types (Show all)Operational
Problem types (Show all)Coastal
Drain and Sewer
Illustrations (Show all)rm_images/central_bank.png
Last modified: Sept. 16, 2016, 3:20 a.m.