Bank green lending and credit risk: an empirical analysis of China's Green Credit Policy

This study empirically investigates the relationship between banks' green lending and their credit risk, how Chinese finance regulations contribute to solvency of individual banks resilience financial system. Analysing a sample 41 from 2007 2018, we find that association bank's (relative) as proportion its overall loan portfolio, depends critically on size structure state ownership. While implementation China's Green Credit Policy reduces risk for major state-controlled banks, it increases city regional commercial banks. performance difference appears largely due information expertise asymmetries, with having less access necessary evaluate lending. Understanding this phenomenon can help policymakers tailor policies according characteristics. It also suggests mechanisms platforms city/regional learn could be beneficial.