Does climate change affect bank lending behavior?

We examine how banks adjust credit supply in areas with higher exposure to climate risks by utilizing the province-level air pollution and loan growth data of a large emerging market, Turkey, following Paris Agreement 2015. Our results show that limit their extension more polluted provinces post-agreement interval, implying consider change-related provisioning accordingly. baseline findings are intact against myriad robustness checks. also find shift risk-credit nexus is asymmetric depending on levels pollution.