Bank Funding Under Threat: Evidence from Local Terrorist Attacks

Du 7 mai 2026 au 7 mai 2026

De 12h30 à 13h30, en salle du Conseil (1er étage de la faculté de droit, économie et gestion).
Présentation en français.
Accessible en distanciel sur l'équipe Teams "Séminaires Granem" (réservé aux membres).

Ce séminaire est organisé par Melchisedek Joslem Ngambou Djatche, maître de Conférences en Sciences économiques, et membre du Granem, grâce à son projet de recherche "Changement climatique et stabilité du système financier" (financement Pulsar Région Pays de la Loire).

• Whelsy Boungou, enseignant-chercheur à Paris School of Business

"Bank Funding Under Threat: Evidence from Local Terrorist Attacks"

Résumé :

This paper examines how terrorist attacks affect banks’ funding structure, focusing on Africa, a region highly exposed to security shocks yet largely overlooked in the banking literature. Using bank-level data from 543 banks in 97 cities across 52 African countries over 1986–2024, combined with granular information on terrorist attacks from the Global Terrorism Database, we exploit city-level variation in terrorist attacks to identify localized exogenous terrorism shocks to banks. Our findings provide strong evidence that terrorist attacks and their intensity cause a significant contraction in customer deposits, banks’ primary and most stable source of funding. This deposit outflow generates immediate liquidity pressure and induces banks to substitute toward alternative, less stable funding sources, particularly interbank borrowing. Our results also show that the contraction in deposits constrains banks’ lending, deteriorates asset quality, and weakens financial performance. These results underscore a systematic reconfiguration of bank liabilities in response to terrorism, revealing a novel channel through which security shocks undermine financial stability. From a policy perspective, the results underscore the importance of incorporating security risks into liquidity stress tests and macroprudential frameworks, and the strengthening of emergency liquidity facilities in terrorism-prone environments.