Economic Policy Uncertainty and Bank Risk Taking——Based on the Evidence of the Banking System in China and the United States
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Abstract Based on the empirical data of the banking industries in China and the United States, this paper tests how the economic policy uncertainty works in the bank risk taking channel by constructing a dynamic panel GMM model, and by using the economic policy uncertainty index compiled by Baker, Bloom and Davis (2013). The results show that the economic policy uncertainty undermines the overall risk taking and credit growth of the banking system under the loose monetary policy in both countries. However, the test results of the discriminant sample show that the higher the economic policy uncertainty is, the state-owned banks are more inclined to take risk. According to the results of the credit growth rate affected by the bank’s risk taking, commercial banks in China have a lower credit growth rate with higher risk-taking, while commercial banks in U.S. show the opposite characteristics—the higher the risk-taking, the higher the credit growth rate.
HE Guohua,WU Piao. Economic Policy Uncertainty and Bank Risk Taking——Based on the Evidence of the Banking System in China and the United States. Economic Survey, 2020, 37(2): 0159.
2020, Vol. 37 
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