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Stranded in the wastelands? Natural capital depletion and bank deposit reallocation

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  • Ramos-Francia, Manuel
  • Karlström, Peter
  • Montañez-Enríquez, Ricardo
  • Ossandon Busch, Matias

Abstract

Using unique data on natural capital stock in Mexico since the 1980s, this paper shows that significant natural capital losses are associated with a reallocation of bank deposits and credit, shifting funds from environmentally distressed regions to those with abundant natural capital. Identification relies on comparing bank branches within the same municipality that differ in exposure to natural capital losses through their banks’ regional spread. The findings highlight that adaptation responses to environmental degradation can be affected by a natural capital depletion spiral, driven by a geographical reallocation of bank activities.

Suggested Citation

  • Ramos-Francia, Manuel & Karlström, Peter & Montañez-Enríquez, Ricardo & Ossandon Busch, Matias, 2026. "Stranded in the wastelands? Natural capital depletion and bank deposit reallocation," Journal of Banking & Finance, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:jbfina:v:184:y:2026:i:c:s0378426625002444
    DOI: 10.1016/j.jbankfin.2025.107624
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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