Research On The Impact Of Green Credit On Commercial Banks’ Business Risks

The 20 th Party Congress report pointed out that we should accelerate the green transformation of the development mode,deeply promote the prevention and control of environmental pollution,enhance the diversity,stability and sustainability of the ecosystem,and actively and steadily promote carbon peaking and carbon neutrality.In order to realize the green transformation of China’s economic development faster and better,green finance plays a key role.However,the green credit business,which is the core part of green finance,started late in China and is still at the stage of large-scale development.The supervision and management system and evaluation system at the macro level have not yet been perfected,and there are many risk factors for banks to carry out green credit business,such as information asymmetry,mismatch of banks’ maturity structure and short-term profit volatility.Against this background,it is of great theoretical and practical significance to investigate the impact of green credit on the business risks of commercial banks and the impact mechanism.This paper first defines the concepts of green credit and commercial bank business risks,composes the literature related to green credit and commercial banks,and describes the evolution,current situation and problems of green credit in China.Secondly,financial sustainability theory,information asymmetry theory,environmental risk management theory and corporate social responsibility theory are used to explain the impact of green credit on commercial banks’ risk,and the corresponding mechanism analysis and hypotheses are proposed based on the above theories.To verify the correctness of the hypothesis analysis,a total of 48 representative commercial banks’ panel data from 2006-2021 are selected in this paper to empirically analyze the impact of green credit policies on commercial banks’ business risks by constructing multi-temporal double difference models for regression,and further conducting impact mechanism tests and heterogeneity analysis.The following conclusions are drawn: first,the implementation of green credit can effectively reduce the business risk of commercial banks;second,in terms of the impact mechanism,the implementation of green credit exerts a positive impact on the business risk of banks by enhancing their reputation and improving their profit structure.Third,in terms of bank heterogeneity,the implementation of green credit by large state-owned banks,banks with nationwide operations,and banks with low gearing has a greater effect on the reduction of their operational risk.Based on the above conclusions,this paper puts forward the following targeted suggestions: first,the government should encourage commercial banks to actively carry out green credit business;second,the regulatory authorities should improve the environmental information disclosure system;third,commercial banks should increase the innovation of green finance-related products;fourth,the government should increase the assistance to the green credit business of small and medium-sized banks.