Environmental policy stringency and bank risks: Does green economy matter?

Chien-Chiang Lee (), Chih-Wei Wang, Pei-Hsuan Hong and Weizheng Lin

International Review of Financial Analysis, 2024, vol. 91, issue C

Abstract: This study examines the relationship between environmental policy stringency (EPS) and bank risks, with an additional focus on exploring the influence of EPS on bank risks through the mechanism of green economy. The primary result of our study reveals that EPS can increase bank risks. Additionally, we find that EPS contributes to the mitigation of bank risks through the channel of green economy. Moreover, we identify that EPS can more prominently increase bank risks in both Asia and Europe and during non-crisis periods. Furthermore, for banks with greater capital, lower leverage, and in developed countries, the favorable influence of EPS on bank risks becomes increasingly noteworthy.

Keywords: Environmental policy stringency; Bank risks; Green economy (search for similar items in EconPapers)
JEL-codes: G21 G38 Q54 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:91:y:2024:i:c:s1057521923005562

DOI: 10.1016/j.irfa.2023.103040

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