Economic Policy Uncertainty and Bank Stability: An Analysis Based on the Intermediary Effects of Opacity

Ruiwen Zhang and Shujun Wang ()
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Ruiwen Zhang: School of Management, University of Science and Technology of China, Hefei 230026, China
Shujun Wang: School of Management, University of Science and Technology of China, Hefei 230026, China

Sustainability, 2023, vol. 15, issue 5, 1-17

Abstract: With the background of deepening uncertainty about global and Chinese economic policy, the stability of the banking industry is of great strategic significance for promoting the high-quality development of the real economy and maintaining the order of the financial market. This paper uses the panel data of 32 commercial banks in China during the period of 2007–2020 to test the impact of economic policy uncertainty on bank stability and the mediating role of opacity. The research results show that the economic policy uncertainty has a negative impact on bank stability. Opacity plays a partial intermediary role between economic policy uncertainty and bank stability: economic policy uncertainty indirectly affects bank stability by stimulating banks to reduce market exposure and improve earnings opacity.

Keywords: economic policy uncertainty; bank stability; bank opacity; SOR theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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