Research On Economic Policy Uncertainty And Chinese Banks’ Risk-Taking

In the era of economic globalization,the relationship between our economy and the world economy is becoming more and more close.Changes in the international political situation and economic policies have increased the difficulty of macroeconomic regulation in China.In order to deal with the impact of domestic and foreign uncertainty,our government will actively use various economic policies to exercise macro-control over it,frequently adjust economic policies,reflecting the uncertainty of economic policies.In our country’s economic decision-making,the banking system plays a vital role,is sensitive to economic policy uncertainty,and its risk-taking behavior has an important impact on the financial supervision department and the country’s financial stability.Therefore,in the context of preventing financial risks and maintaining financial stability,it is of great significance to study the impact of economic policy uncertainty on the risk taking of banks.Firstly,on the basis of combing the relevant literature,this paper summarizes the relevant concepts and theoretical bases of economic policy uncertainty and risk taking of commercial banks,analyzes the mechanism of economic policy uncertainty on risk taking of commercial banks and puts forward some research hypotheses.Based on the data of 165 commercial banks in China from 2008 to 2020,the fixed effect model was used to verify the data.Empirical analysis shows that:(1)the increase of economic policy uncertainty shocks will weaken banks’ willingness to take active risks and increase banks’ passive risk taking.(2)Higher provisions for bank loans will significantly reduce the disincentive effect of economic policy uncertainty on banks’ active risk taking and also help to reduce the contribution to banks’ passive risk taking.(3)In terms of active risk-taking,listed banks are more constrained by rising economic policy uncertainty than unlisted banks.Banks with low capital ratios are more inhibited than banks with high capital ratios.(4)With regard to passive risk-taking,increased economic policy uncertainty will increase passive risk-taking by listed banks and have a disincentive for banks with high capital adequacy ratios.Based on the above conclusions,targeted recommendations are made:(1)Economic policymakers should maintain continuity and consistency in the delivery of economic policies.(2)The supervisory authority shall improve the supervisory mechanism and strengthen the supervision of the classification of banks.(3)To improve the quantitative capacity of bank credit risk and establish comprehensive risk management.