Abstract: This paper examines the economic e!ects of natural disasters, specifically earthquakes, on local economies in Italy, focusing on the roles that financial development and banking structures play in shaping recovery and resilience. Using municipal-level data across all
talian seismic events from 2008 to 2022 we provide a refined analysis of post-disaster economic dynamics. Our findings reveal that while the immediate impact of earthquakes on
employment is limited, the number of enterprises initially declines, followed by significant
recovery and growth over the long term. The presence of banking institutions, particularly cooperative banks, plays a crucial role in facilitating this recovery, underscoring their
importance in stabilizing local economies.