Rising floods threaten Danish financial system

(Climate News Network, 17 Jun 2021) Stormier seas and more frequent floods can cause havoc anywhere. The Danish financial system is now growing apprehensive.

Flooding caused by storm surges and general changes in climate give rise to misery around the world, destroying homes and livelihoods and forcing the migration of hundreds of thousands of people. The financial impact of floods can also impose severe economic strains, and not just in the developing world: the Danish financial system now fears growing losses to come.

Denmark is a relatively small country but has a long coastline, stretching for more than 8,000 kilometres.

As part of a series of reports on the impacts of climate change, Danmarks NationalBank, the country’s central bank, warns that billions of dollars have been loaned to householders and businesses located in coastal and other flood-prone areas.

Flood damage could make recouping many of these loans extremely difficult; credit institutions with substantial exposure to such loans could go out of business. The integrity of the financial system might be threatened.

“Exposures of 41 billion krone (US$7billion) are currently located in areas already at risk of flooding”, says the central bank.

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Climate News Network, 17 Jun 2021: Rising floods threaten Danish financial system