The Impact Of Economic Policy Uncertainty On The Credit Risk Of Commercial Banks

In the current economic environment,uncertainty has become the norm faced by economic entities.As China enters the new economic normal period and the pace of comprehensively deepening reform continues to advance,more and more economic policies have been introduced to promote the adjustment of economic structure.The research on economic policy uncertainty is constantly developing,and the economic policy uncertainty index calculated by Baker has become an important reference indicator for research.This article focuses on the impact of economic policy uncertainty on commercial banks,selecting the most important credit business in the daily operations as the focus.Credit business income is a major component of commercial banks’ income,so credit risk is also one of the most significant risks.This thesis believes that increased economic policy uncertainty will affect the credit risk of commercial banks,and have different effects among different types of banks.Therefore,in the empirical analysis section,this article uses data from 109 commercial banks during 2007-2021 to construct a regression model,and uses fixed effect,generalized method of moment to conclude that increasing economic policy uncertainty will increase the credit risk of commercial banks.Different types of banks are affected to different degrees,with rural commercial banks being the most affected,non-listed commercial banks are also more affected than listed commercial banks.The impact mechanism of economic policy uncertainty on credit risk is also analyzed.Increasing economic policy uncertainty will increase bank credit risk by increasing the lending scale.Further,a case study of Jiangsu Zijin Rural Commercial Bank was selected.From a series of events such as the expansion of Zijin Rural Commercial Bank,carrying out differentiated reform,to experiencing the listing test,it has verified the positive relationship between economic policy uncertainty and credit risk.Then mining its data to analyze credit business indicators,and verifying the borrowing scale path.According to relevant economic events,analyze the reasons and sort out the corresponding credit risk management adjustment measures.Finally,based on the empirical and case study results,corresponding policy recommendations are proposed.