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

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  • Wu, Meixuan
  • Zhang, Lina

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.

Suggested Citation

  • Wu, Meixuan & Zhang, Lina, 2025. "Green credit, deposit-loan ratio, and risk taking of commercial banks," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007299
    DOI: 10.1016/j.frl.2025.107470
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