Research On The Impact Of China’s Economic Policy Uncertainty On The Scale And Structure Of Commercial Bank Credit Supply

With the continuous development of China’s economy and the continuous improvement of its opening-up degree,China’s economic status in the world has been continuously improved,and its connection with the world economic environment has become more and more close.At present,our country clearly puts forward the stability of economic development and attaches great importance to the important role of domestic demand of investment and consumption in economic development.However,since the financial crisis in 2008,the western concept of economic development has begun to change.Meanwhile,the COVID-19 pandemic has become more unpredictable in the international economic environment in recent years.At the same time,China’s economy is characterized by "emerging + transition",its economic growth is in a downward stage,and its economic structure is constantly adjusting.Economic policy uncertainty is on the rise.These uncertainties expose commercial banks to various risks,especially credit risks.Under strict external supervision and the principle of safe operation,commercial banks will change their own credit supply in order to prevent credit risks,and the source of domestic funds will be affected,thus affecting the steady development of economy.Therefore,this paper studies the impact of economic policy uncertainty on the credit supply of commercial banks,which is helpful for regulators to prevent financial risks,but also helps commercial banks to strengthen their own robust operation,and contributes to the healthy development of the real economy.Based on the above background,this paper first reviews relevant literature and finds that the economic results of economic policy uncertainty mainly include macro and micro aspects.At the micro level,it will change household savings,investment,enterprise investment,financing,cash holding and other behaviors,and also change the liquidity creation,risk taking and credit scale of commercial banks.On this basis,this paper takes the residents,enterprises’ behavior and monetary policy channels into consideration to establish the indirect mechanism of economic policy uncertainty affecting the credit supply of commercial banks,and establishes the theoretical basis of this paper.Secondly,by analyzing the reality of economic policy uncertainty in China,it is found that it presents the characteristics of anti-business cycle,accompanied by relatively loose monetary policy,and the credit supply of Chinese commercial banks and economic policy uncertainty presents a certain deviation relationship.Based on the reform process of Chinese commercial banks and the characteristics of economic policy uncertainty,the unbalanced panel data of 108 commercial banks from 2007 to 2020 are selected for empirical test.The empirical analysis shows that: first,when the uncertainty of economic policy increases,commercial banks will reduce the scale of their credit supply on the one hand,and on the other hand will shift their credit supply to the loan type with less risk,thus changing their credit supply structure;Second,the capital adequacy ratio has a moderating effect on the scale and structure of commercial banks’ credit supply.Thirdly,the economic policy uncertainty exerts the same influence on different types of commercial banks in the same direction but to different degrees.Stateowned banks are more strongly inhibited by the credit scale,followed by urban commercial banks.In the credit structure,the adjustment range of city firms is larger;Fourth,the indirect mechanism test found that savings intention and loan demand played a significant part of the intermediary role in the mechanism of economic policy uncertainty affecting the scale of commercial banks’ credit supply,but the monetary policy channel showed a certain degree of masking effect.Finally,based on the research conclusions of this paper,the author puts forward some policy suggestions:(1)The government should fully grasp the reality of economic development and maintain policy stability and continuity;(2)Central bank supervision should pay attention to micro bank differences and reasonably evaluate policy results;(3)Commercial banks should improve the internal credit supply mechanism,strengthen risk prevention and product innovation,and pay particular attention to liquidity risk management that may be caused by maturity mismatch.