Research On The Impact Of Green Finance On The Profitability Of Commercial Banks In China

Over the past four decades since the reform and opening up,China’s economy has achieved remarkable results.Today’s China’s total economic output has already ranked second in the world.However,the traditional high-pollution,high-energy,and resource-based extensive economic development model lurks huge risks.With the rapid development of the economy,such risks are becoming increasingly serious.In reality,the development of China’s highly polluting industries has brought about serious ecological and environmental pollution,which is not only unfavorable to the sustainable development of the national economy,but also the loss of national life and health.At present,ecological problems have risen to the issue of people’s livelihood in China.Under this circumstance,the development of a green economy has become China’s strategic orientation.The Third Plenary Session of the 18 th CPC Central Committee raised the ecological civilization construction to an unprecedented height and gave new strategic opportunities for the development of China’s green finance.In this context,China’s government departments have continuously introduced green finance-related policies,paving the way for the development of financial institutions such as commercial banks,and striving to establish a good green financial market system.As a media and economic capital resource intermediary adjustment hub,commercial banks have a special role in regulating the allocation of green economy.The development of green finance by commercial banks is not only conducive to the orderly operation of China’s economy under the new normal,but also conducive to its own sustainable development.Then China has proposed the development of green economy for many years.Can the introduction and practice of policies bring profit to commercial banks? If you are profitable,how much profitability is there and so on,this paper will lead to thinking about this article.This paper firstly discusses the basic connotation and theoretical basis of green finance.On this basis,it puts forward relevant assumptions about the impact of green finance on the profitability of China’s commercial banks,and analyzes the rationality of this hypothesis by using qualitative and quantitative analysis methods.Then it expounds the impact mechanism and current situation analysis of green finance on commercial banks,and then summarizes the internal and external factors that restrict the development of green finance in China.Secondly,the corresponding model is established to carry out empirical analysis.This paper selects the panel data of 17 representative commercial banks in China after implementing the green credit policy in 2009-2017,and uses the individual fixed effect model to conduct empirical research on the above related issues.The empirical results show that the green credit balance is positively correlated with the net asset value of commercial banks,that is,green credit development can improve the profitability of commercial banks.However,the correlation coefficient of the green credit ratio is relatively small,which indicates that the increase in the scale of green credit does not match the increase in the profitability of commercial banks.There is a gap and further exploration and improvement are needed.Based on the above research results,this paper draws on the experience of national development,and starts from the actual situation in China,and proposes countermeasures to promote green finance construction from the macro,meso and micro levels.