An Empirical Analysis Of The Impact Of Green Credit On The Risk Of Commercial Bank Based On GMM Method

The development of science and technology and the popularity of mobile Internet terminals make us enter the modern information society.While the society has achieved rapid development,environmental problems have brought enormous challenges to the survival of human society.Excessive greenhouse gas emissions,serious river pollution,and deforestation of trees all have a huge impact on human living environment.The government and the public are paying more attention to environmental issues,but it is not enough to rely solely on environmental protection departments to solve environmental problems.The financial sector can regulate the resources needed for economic development,therefore,it is necessary to strengthen the role of financial institutions in environmental protection,then green credit has emerged in this context.When commercial banks develop green credit,they will consider the impact of this business on their risk level,and the purpose of this paper is to explore the relationship between the development of green credit and the risk level of commercial banks.This paper firstly combs the relevant theories of green credit development,and from the perspectives of corporate social responsibility,social sustainable development and equatorial principles,the development of green credit is beneficial to the operation of commercial banks,but at the same time it should also pay attention to the risks of green credit business,especially the impact of environmental risks on the quality of commercial banks’ assets,then on this basis,this paper analyzes the path of green credit affecting commercial banks’ risks.Secondly,the article analyzes the overall development of green credit and makes a detailed discussion with Industrial Bank as a typical representative,from these,we can make a conclusion that green credit is beneficial to reduce the risks of commercial banks theoretically.Then,the article takes the annual data of fifteen commercial banks from 2011 to 2017 as a sample,and bases on GMM estimation for dynamic panel data,finally confirms the conclusion that green credit can indeed play a role in reducing the risk level of commercial banks from empirical perspective.However,due to the fact that the current development of green credit in China is not large enough,the role of green credit in reducing risks of commercial banks has not been fully utilized.Therefore,this paper starts with the specific business of green credit and proposescountermeasures for commercial banks to develop green credit: commercial banks should standardize the process of green credit business and design reasonable business handling procedures,cultivate professional green credit business talents and improve the ability of employees to handle green credit business,increase the innovation of green credit products and promote the overall development of business,improve the risk prevention and control system and innovative risk prevention and control measures.It is hope to achieve the goal that green credit can be sustainable and become a treasure for resisting risks of commercial banks through these measures.