The Impact Of Economic Policy Uncertainty On Bank Of Shanghai's Credit Risk Taking

As the largest emerging economy in the world,our government often introduces a series of macroeconomic policies to control economic development,including fiscal policy and monetary policy.However,the introduction and change of these policies often have the effect of "policy experiment",which increases the uncertainty of economic policies.Many studies have begun to pay attention to this point,especially the impact on the activities of commercial banks.Although more and more literatures begin to link the uncertainty of economic policy with commercial banks,the research on the relationship between economic policy uncertainty and bank credit risk taking is very limited.Based on the existing literature research,this paper mainly explores the impact of economic policy uncertainty on the credit risk bearing on Bank of Shanghai.Taking the business data of Bank of Shanghai from 2009 to 2019 as the research sample,this paper studies and analyzes the impact of economic policy uncertainty on its credit risk taking from both theoretical and empirical perspectives.This paper studies the impact of economic policy uncertainty on Bank of Shanghai's credit risk taking,and makes multiple regression between each sub index of credit risk and economic policy uncertainty.The conclusions are as follows: the higher the uncertainty of economic policy,the greater the credit risk that Bank of Shanghai needs to bear.There are two reasons: first,the rise of economic policy uncertainty will lead risk averse investors to reduce investment and increase lending in order to avoid risk,which will lead to the increase of credit risk.Second,the rise of economic policy uncertainty will lead to the decline of the quality of credit customers,and produce adverse selection problems,which will further increase the credit risk.Therefore,we can find that frequent changes in economic policies have a positive relationship with bank credit risk,which is not conducive to the stable development of the financial industry.Based on this,this paper finally puts forward the corresponding suggestions from the micro level of the bank and the macro level of the government.