FDIC - FDIC: Effect of hurricane on Gulf banks still unclear - Even though banks have historically survived natural disasters, the impact of hurricane Katrina is still unclear. Although banks showed no significant financial deterioration in the years following hurricane Andrew, the Loma Prieta flood, the Northridge earthquake, and the Grand Forks flood, the economic loss from hurricane Katrina alone could amount to one and half times the economic loss from the other disasters combined. Local, state, and federal government assistance will help to offset losses.
In times of disastor, the economy of the affected region, and even the nation, can easily deteriorate, depending on the magnitude of the destruction. In the case of Katrina, the damage was paramount, and due to this, the local economies of the affected areas may very well suffer for a while, or at least remain stagnate, since this occured with all other previous disasters. In the end, after a long while, the economies may rise to normal levels, as did those of the areas affected by previous damage.