A Study On The Development Of Green Finance Business In Commercial Banks

With the rapid development of China's economy at the cost of sacrificing ecological environment,pollutions such as smog have become more and more sever in China in recent years.As a result,an increasing demand for environmental protection and green development have been made.And great importance has been attached to environmental issues at the national level.Consequently,a new development concept of innovation,coordination,green,open and sharing has been put forward during the Fifth Plenary Session of the Eighth Central Committee of the Party and the demand for green development has risen to an unprecedented level.Developing green finance,therefore,is a highly favorable opportunity,as it is taken both as a national strategic objective by the Chinese government and as an easy option taken by commercial banks,which are the main force of China's financial industry.However,the development of green finance highly depends on the coordination between government support policy and market mechanisms compared with policy financial activities,which is part of traditional financial policy activities.This is because the price of environment is hard to measure with accuracy in the market economy activities as environment is public recourse and the price of public recourse is often difficult to measure.Thus,commercial banks should consider environment standards as an important factor in their daily business activities and try to promote sustainable development of society through directing the reallocating of social resource with their own business.This paper first introduces the history of green financial business of foreign and domestic commercial banks,and then explores why commercial banks should carry out green financial business and how to carry out green financial business with examples of domestic green finance industry leader-Industrial Bank.After pointing out successes and shortcomings of the development of Industrial Bank,this paper,drawing out successful experience outside China,focuses on the practical problems faced by commercial banks in China when they carry out the green financial business,such as lack of commercial banks,imperfect legal system in the green finance field,information asymmetry and so on.In the meantime,this paper also provides specific countermeasures and suggestions on issues,such as how to establish effective incentive mechanism,how to speed up the construction of relevant legal systems and how to improve the information disclosure mechanism and information communication mechanism.In the past two years,with the continuous development of green finance innovation in China,the emergence of some new sections has brought about more opportunities for the development of green financial business of commercial banks,for example green bond and carbon finance.As introduced in this paper,the market of those two sections will present explosive grow thin the next few years.Commercial banks thus should seize this unique opportunity to vigorously create green financial innovation to gain their own competitive advantages.Meanwhile,this paper points out in the case of Industrial Banks the advantages of use of equatorial principles and group operations,as well as the effect of the new online professional support system for green finance business.This article takes the case of Industrial Bank as the starting point and explores the development of green financial business of domestic commercial banks.