Research On The Impact Of Green Credit On The Credit Risk Of Chinese Commercial Banks

Since the reform and opening up,China’s economic growth has accelerated rapidly,but the ecological environment has also been damaged by the previous extensive development method.Nowadays,as China pursues green economic development,commercial banks,as an indispensable part of China’s economic operation,should take up their social responsibility and uphold the concept of sustainable development.In order to promote green economic development,countries around the world have adopted the method of "source control" to avoid environmental risks,and green finance is an effective method to prevent risks at source.For China,green finance is mainly composed of green credit,and after the introduction of relevant national policies,green credit has also achieved good results,and now commercial banks in China are carrying out green credit business,but compared with foreign countries,China’s green credit started late and research content is less.So,the study of the impact of green credit on the credit risk of commercial banks has certain theoretical significance and practical significance.Using both normative and empirical analysis,this paper investigates the effect that the mechanisms of the green credit on the commercial banks’ credit risk through the equator principles,the theory of corporate social responsibility and the theory of financial sustainability,on this basis analyses the moderating effect of commercial banks’ reputation level and product innovation,and analysed the heterogeneity of the impact of green credit on national and regional banks.The research subjects are 36 commercial banks with a long history of green credit business in China.14 years of data from 2007 to 2020 are selected,the explained variables are set as the non-performing loan ratio,the explanatory variables are set as the green credit balance,the moderating variables are set as the liquidity ratio and the non-interest income share,the total asset size and return on assets of banks are used as control variables,and the hypotheses proposed are empirically analyzed and tested.The findings show that: green credit by commercial banks helps to reduce credit risk and that the level of reputation and product innovation of commercial banks have a moderating effect,which can strengthen the effect of green credit in reducing credit risk of commercial banks,and the credit risk reduction effect of green credit on national banks is more significant.According to the results of the study,this essay puts forward targeted countermeasures and recommendations on the promotion of green credit development.