Work

Economic policy uncertainty and the risk of Chinese commercial banks

Year: 2025

Type: article

Abstract: Based on panel data from 110 Chinese commercial banks over the period 2010–2021, this study empirically analyzes the impact of economic policy uncertainty on various dimensions of risk in Chinese commercial banks and its moderating effects. The findings indicate that an increase in economic policy uncertainty significantly exacerbates operational and credit risks of banks, while simultaneously reducing their risk-taking levels. This effect is more pronounced in smaller and medium-sized banks. Furthermore, the advancement of digital transformation in banks can effectively mitigate the impact of economic policy uncertainty.

Source: Finance research letters

DOI: 10.1016/j.frl.2025.107437

Authors: Weishu Jing, Cody Yu-Ling Hsiao

Institutions: Macau University of Science and Technology, Zhuhai College of Science and Technology, Macao Polytechnic University

Language: English

Topic: Banking stability, regulation, efficiency

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,730