The ‘Banking Desert’ Mirage

Donald Morgan, Davy Perlman and Maxim Pinkovskiy

No 20180110, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Unbanked households are often imagined to live in urban neighborhoods devoid of banks, but is that really the case? Our map of U.S. banking deserts reveals that most are not in urban areas, where financial exclusion may be endemic, but in actual deserts?largely in the sparsely populated, rural West. Across states, we find that the share of the population in a banking desert is unrelated to the share that is unbanked. If distance from a bank is not what causes financial exclusion, then motivating banks to locate closer to the unbanked may not promote financial inclusion.

Keywords: banking deserts; financial exclusion; unbanked (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2018-01-10
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