Public trust and bank branching regulation on personal loan grants and default risk: Evidence from regional commercial banks in China

Mohan Fonseka and Grant Richardson

International Review of Finance, 2025, vol. 25, issue 1

Abstract: We examine the effect of public trust on personal loan grants and the default risk of Chinese regional commercial banks during the bank branch regulation regime changes. Using exogenous shocks of bank branch regulation regimes in quasi‐natural experiments, we find that public trust exhibits a more pronounced increase in personal loan grants for regional banks. Additionally, we report a negative relationship between public trust and default risk. Finally, we observe that city commercial banks that open branches in high public trust provinces during the deregulation period lead to an increase (decrease) in personal loan grants and (default risk).

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/irfi.70003

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:irvfin:v:25:y:2025:i:1:n:e70003

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1369-412X

Access Statistics for this article

International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

More articles in International Review of Finance from International Review of Finance Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().