Commercial Banks In China Research Articles

ESG performance and green innovation in commercial banks: Evidence from China.

Environmental, Social, and Governance (ESG) is closely related to commercial banks' promotion of "dual-carbon" goals and the concept of sustainable development. The impact of ESG performance on commercial banks' support for green innovation remains an issue for in-depth study. This paper studies 36 Chinese commercial banks in China from 2010 to 2021 and finds that the ESG performance of commercial banks can promote green innovation, and this promotion is more obvious when bank remuneration incentives are effective. Meanwhile, this paper verifies the mediating role of the non-performing loan ratio and the Lerner index in it, which provides channel support for ESG to effectively promote green innovation development. This study enriches the existing literature on environmental, social, and governance performance and green innovation in commercial banks and provides new perspectives and directions for future research.

The Impact of Inflation on Commercial Banks in China

Abstract: Inflation is an important issue that affects the profitability and operational stability of commercial banks. Conducting an in-depth analysis of these influences while putting forward effective countermeasures can be beneficial to ensuring the stable operation of commercial banks. This paper focuses on the period from 1937 to 1949 where the Second Sino-Japanese War and the Chinese Civil War, which had contributed to severe inflation and disrupted the banking sector, and the formation of the modern Chinese banking system. This study critically examines the main causes behind inflation, evaluates their implications on the functioning of commercial banks. It also assesses both the positive and negative impacts on commercial banks, pointing out the challenges commercial banks face during different periods. For example, the market turmoil and policy changes in the 1940s have made it difficult for commercial banks to retain normal operation; therefore are suffering from making profits and inflation has made the situation even worse. In addition, this paper provides short-run and long-run strategies for reducing the negative effects of inflation, with consideration of Chinas unique economic structure and historical context. By integrating insights from historical and contemporary perspectives, this analysis aims to offer valuable views on the micro and macro impacts inflation could bring.

Research on the Bankruptcy Tendency of the United States Bankrupt Commercial Banks during the 2008 financial crisis

With the rapid development of the financial market, banks are faced with increasingly frequent capital flows and rapidly changing business environment. It is an important prerequisite for commercial banks to control their liquidity risk to deeply study the causes of liquidity risk and clarify its economic consequences. In the financial crisis during 2007-2009, American commercial banks were directly impacted by liquidity risk. The characteristics of their bankrupted banks are of great significance to the study of how to avoid bank liquidity losses. This study found that in aspect of the probability of commercial banks bankruptcy, the larger scale the banks’ current deposit is in the initial stage, the larger rate of the loan is. The larger the loan issuance ratio is in perportion, the worse the liquidity management of commercial banks’ efficiency acts. And other characteristics make the bank's bankruptcy probability greater. This result has reference significance for commercial banks in China.

The impact of fintech on the efficiency of urban commercial banks in China-based on super slacks-based measures with undesirable output

This study endeavours to elucidate the influence of financial technology (fintech) on the operational efficiency of urban commercial banks in China. By scrutinizing the integration of Internet-based fintech solutions, it seeks to illuminate their potential for streamlining banking processes, elevating customer experiences and augmenting the precision of credit assessments and lending decisions through sophisticated data analytics and risk management tools. This research evaluates the efficiency of Chinese urban commercial banks employing the Super Slacks-Based Measure (Super-SBM) which incorporates undesirable output. Furthermore, it leverages the System Generalized Method of Moments (System GMM) to investigate fintech’s specific impact on urban commercial bank efficiency across various Chinese regions. The findings underscore fintech’s pivotal role in catalyzing digital transformation within banks, thereby bolstering operational efficiency and customer satisfaction. Moreover, this study highlights the critical importance of fintech in fortifying risk management capabilities within the banking sector. The insights gleaned from this research contribute to the banking industry’s sustainable growth and competitive resilience. Additionally, the findings furnish policymakers with empirical evidence to support the strategic integration of fintech and the optimization of banking service processes. Urban commercial banks can streamline operations, enhance customer experiences, refine credit assessments and ultimately attain higher efficiency and long-term sustainability levels in the rapidly evolving financial landscape by harnessing the transformative potential of fintech.

Research on Credit Risk Contagion of Commercial Banks Based on Copula Model

Research on the credit risk contagion effect of commercial banks is a key issue in credit risk management of commercial banks. This paper constructs a measurement framework for the credit risk contagion effect of commercial banks based on the Copula function theory. On the basis of selecting the appropriate Copula function and measuring specific parameters, taking Bank of China and Industrial and Commercial Bank of China as examples, the tail correlation coefficient was used to measure the credit risk contagion effect of the two banks, and relevant conclusions were drawn.

Nexus between green credit efficiency and strategic, business and management digital transformation–based on 114 commercial banks in China

With the expansion of green finance and the digital economy, the discussion on the evolution of green credit business and the digitalization of commercial banks have grown in prominence. However, limited research has been done on how different degrees of digital transformation in commercial banks—the main issuers—affect the way of green credit efficiency. To fill this gap, based on data from 114 Chinese commercial banks between 2010 and 2021, this paper explores the impact of digitalization on the green credit efficiency through the integration of several methodologies. The paper indicates that enhancing the digitalization, business digitization, and management digitization of commercial banks can greatly enhance the effectiveness of green credit businesses, but the impact of strategic digitization is not significant. Further analysis reveals that digitization facilitates the expansion of overall bank assets, thereby bolstering the green credit business. It also investigates the characteristics of commercial banks and the geographical distribution of their headquarters, indicating a diminished promotional impact for urban and rural banks, as well as banks in the central areas. Finally, this study contends that commercial banks ought to leverage digital resources extensively to facilitate digital transformation and bolster the advancement of green credit operations. It is also recommended that the government should implement preferential policies for regions and banks exhibiting slower developmental progress.

The impacts of China's shadow banking regulation on bank lending—An empirical analysis based on textual analysis and machine learning

China's financial regulatory authority has strengthened shadow banking regulation in recent years, the impact of which has attracted the attention of academics and policymakers. We develop China's shadow banking regulation intensity change index using textual analysis and machine learning methods and explore the impacts of the regulation on bank lending. Using a fixed effect model and a dataset of 177 commercial banks in China from 2007 to 2020, we find that strengthened shadow banking regulation results in shrinkage in bank loan scale and lower loan growth. Mechanism analysis reveals that the asset-reallocation motives and profit-seeking motives generated by banks faced with strengthening regulation lead to a decline in bank lending. The credit tightening effect mainly exists in joint-stock, city, and rural commercial banks while insignificant in state-owned banks. This effect can be moderated by ample capital, abundant deposits, and high loan issuance efficiency. Strengthened regulation also affects loan composition, with an increase in the proportion of corporate lending and a decrease in mortgage lending. Our results have novel implications for both regulators and banks and are robust to several tests.

Green credit efficiency of commercial banks in China: Evidence from a multi-period leader-follower model with preference

The efficiency of green credit in commercial banks is important for promoting green economic development. But seldom studies have investigated the efficiency evaluation of banking green credit activities. To fill this gap, this paper proposes a model for assessing the efficiency of green credit and further investigates the factors that potentially affect the efficiencies. The evaluation model for green credit efficiency is built through a multi-period leader-follower framework by innovatively considering green credit as an inherent input-output indicator with preference. The results demonstrate that the green credit efficiency of the Chinese commercial banks in the profit earning stage generally surpasses that in the deposit conversion stage. Throughout the multi-period analysis, the majority of banks, especially those that are state-owned, have improved their deposit conversion efficiency from 2017 to 2021. The efficiency in the profit earning stage for all banks significantly declined due to the impact of COVID-19. Bank size, asset quality, and macroeconomic conditions have significant influences on green credit efficiency. However, their influences vary heterogeneously across different stages and types of banks.

Local official turnover and bank risk-taking: Evidence from China

This study investigates the impact of turnover among local government officials on the risk-taking of local commercial banks in China. Our findings reveal a positive relationship between official turnover and risk-taking in banks. The observed effect is mainly due to a deterioration in credit allocation and heightened competition among banks. Heterogeneous analysis indicates that the impact is more significant in non-election years, in years of enhanced anti-corruption efforts, in regions with poor credit environments, and among smaller banks or banks without political connections. Additionally, compared to normal and local turnover, the positive impact of local official turnover on banks' risk-taking is more pronounced for abnormal and non-local turnovers. These insights deepen our understanding of the economic consequences of official turnover on commercial banks and offer valuable perspectives for banks' risk management strategies.

Research on the Bankruptcy Standard of Commercial Banks in China

Crisis of commercial banks has been reported frequently, and it is normal for them to fail and quit in the market competition. In order to maintain the national financial order and prevent systemic crisis, it is of great significance to improve the legal system of commercial bank bankruptcy to deal with the problematic commercial banks in a timely manner. Commercial bank insolvency standards as the application of commercial bank insolvency legal system, scientific and reasonable commercial bank insolvency standards is the key to commercial bank insolvency legal system to play a useful role. At present, the bankruptcy of commercial banks in China applies the general corporate bankruptcy standard. Based on the special characteristics of commercial bank insolvency, the introduction of regulatory standards and the establishment of diversified commercial bank insolvency standard system can be considered.

Sustainable performance evaluation of the banking industry based on CPT-TOPSIS: a case study of commercial banks in China

Sustainable performance evaluation of the banking industry based on CPT-TOPSIS: a case study of commercial banks in China

The Impact of Green Credit on the Profitability of Commercial Banks in a Low-Carbon Context

This paper delves into the concept of green credit and its theoretical underpinnings, contending that it exerts a discernible influence on the profitability of commercial banks. Through empirical investigation employing an individual fixed effect model, it seeks to ascertain the precise impact of green credit on the profitability of such banks. Drawing on panel data encompassing 16 commercial banks in China spanning the period from 2011 to 2020, this study undertakes a thorough analysis to gauge the extent to which green credit affects bank profitability. The findings of this analysis not only contribute to a deeper understanding of the relationship between green credit and bank profitability but also inform potential strategies for enhancing the financial performance of commercial banks in the context of environmental responsibility. By synthesizing these insights with a comprehensive analysis of the prevailing circumstances, the paper concludes by offering recommendations aimed at bolstering the profitability of commercial banks, thereby aligning their operations more closely with sustainable principles and environmental objectives.

Credit Risk Management Practices and Financial Performance of Selected Rural Commercial Banks in China

Credit Risk Management Practices and Financial Performance of Selected Rural Commercial Banks in China

Divergent credit risk responses to local government debt among Chinese banks: a stress test analysis

ABSTRACT This study explores the heterogeneous impact of local government debt on credit risk across ‎state-owned and urban and rural commercial banks in China, through the analysis of stress test ‎methodology and quarter-based data in the period 2014–2021. It found that if the scale ‎of local government debt expands, the Non-Performing Loan (NPL) rates will reduce in state-owned commercial banks, ‎while the rural and urban commercial banks will increase. In the case of further decay in the scale of local government debt and macroeconomic indicators, there would be more credit risk in a heterogeneous manner among different-sized commercial banks. Medium-sized urban commercial banks have the smallest rise in non-performing loan rates due to the higher individual and corporate credit risks they face. Moreover, the study finds the resiliency of the risks weak and poor preparation for loan impairment in covering the potential loan losses in a pressured scenario compared to their counterpart urban and state-owned rural commercial banks. The findings suggest that rural commercial banks need to improve their risk ‎resilience to cope with extreme shocks.

ESG Performance of Chinese Commercial Banks

As a core component of China’s financial system, the banking industry is crucial for economic development. As a leading institution in the Chinese financial sector, commercial banks can actively promote the ESG development of Chinese enterprises by leveraging their ESG performance. This study selected the top three commercial banks in China’s ESG rating rankings, including the Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China, to conduct a detailed analysis of their published ESG reports and social responsibility reports. The purpose is to extract the practical experience of these banks in ESG governance and provide a reference for other banks in the same industry.

Research on credit card default repayment prediction model

This study compares the predictive ability of various machine learning models for credit card default repayment within different prediction frameworks, using data from a commercial bank in China. Firstly, utilizing different tree models, we explore the impact on post-default repayment of different factors. Next, a split-sample time series prediction is carried out with two neural network algorithms, BPNN and ELM. The outcomes indicate that, ELM yields a significantly superior prediction performance compared to the BPNN model. Thirdly, the predictive performances of ten machine learning models are compared using full-sample data. The findings demonstrate that XGBoost and ELM models have superior predictive performances in full-sample analyses. Fourthly, this study employs the EMD data decomposition technique to examine the predictive ability of the XGBoost and ELM models in various frequency data. The results indicate that the predictive efficacy may differ depending on the frequency and repayment period after default. The findings are valuable for commercial banks in developing a framework and selecting a methodology to address the challenge of predicting credit card default payments.

Assessing the Impact of Financial Technology Innovations on the Sustainable Profitability of Listed Commercial Banks in China

Commercial banks constitute a crucial segment of China’s financial system, and their efficient operation is directly linked to the development of other sectors within the national economy. The sustainable profitability of these banks is vital for maintaining the stability of China’s financial system. In the context of the current digital economy, it is of great theoretical and practical significance to conduct an in-depth analysis of the impact of financial technology (fintech) development on the sustainable profitability of commercial banks and its underlying mechanisms. Such research can promote the digital transformation of commercial banks, enhance risk supervision policies, and mitigate systemic financial risks. This study utilizes EViews software Version 13 to analyze annual data from 13 listed commercial banks in China over the period from 2011 to 2021. It examines the influence of fintech on the profitability of these banks, considering their unique characteristics and drawing insights from the existing literature on the mechanisms through which fintech affects bank profitability. Employing both a static panel fixed effects variable-intercept model and a dynamic panel generalized method of moments (GMM) model, the empirical findings indicate that fintech development significantly impacts the profitability of listed commercial banks.

Deposit insurance system and commercial bank profitability: A quasi-natural experiment based on the deposit insurance regulations

This article examines the profitability of commercial banks in China, specifically focusing on the impact and processes of the deposit insurance system on banks` profitability. The consequences and underlying mechanisms are explored using a difference-in-difference model based on financial data from listed banks in China from 2007 to 2022. The findings indicate that implementing the deposit insurance regulation can promote commercial bank profitability. The positive effects are achieved by enhancing their risk-taking, liquidity, and growth ability. The findings is conducive to enhance the banking industry's growth and improve the financial services provided to the real economy.

Research on Information Security Management and Protection Measures of Financial Enterprises in the Era of Big Data---Take the USA of Industrial and Commercial Bank of China

Research on Information Security Management and Protection Measures of Financial Enterprises in the Era of Big Data---Take the USA of Industrial and Commercial Bank of China

Monetary Policy, Capital Regulation and Systemic Risk in Commercial Banks: Evidence from in China

This paper examines the impact of monetary policy and capital regulation on commercial banks' systemic risk using a fixed panel model with data from 16 listed commercial banks in China from Q1 2011 to Q4 2019. The results show that both quantity-based monetary policy instruments, represented by currency issuance, and price-based monetary policy instruments, represented by interest rates, affect systemic risk. And they both show that accommodative monetary policies amplify commercial banks systemic risk. Besides, capital regulation has a dampening effect on systemic risk, and the intensity of regulation moves inversely with systemic risk. In addition, there is a synergistic effect between monetary policy and capital regulation. Furthermore, a symbiotic relationship exists between monetary policy and capital regulation. The findings of this study assist nations in managing systemic financial risks through macroeconomic policies.