Green credit, deposit-loan ratio, and risk taking of commercial banks

Meixuan Wu and Lina Zhang

Finance Research Letters, 2025, vol. 81, issue C

Abstract: As environmental awareness grows, governments and social groups increasingly recognize the importance of green credit. The expansion of green credit inevitably influences banks’ deposit-to-loan ratios. This paper examines the impact of green credit policies on commercial banks risk-taking using a mediation effect model to assess the role of the deposit-to-loan ratio. Findings indicate a negative correlation between green credit and commercial banks’ risk-taking, with the deposit-to-loan ratio serving as a significant mediator.

Keywords: Green credit; Deposit-to-loan ratio; Bank risk-taking; Mediation effect modeling (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007299

DOI: 10.1016/j.frl.2025.107470

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