Publication:
Trade uncertainty and bank credit growth: evidence from China and the european union countries
Loading...
Abstracts views
11
Views & Download
2
Date
2024
SDG:
Abstract
This paper examines the relationship between trade uncertainty and bank lending using a sample of commercial banks in China and the European Union (EU) countries during the period of heightened trade uncertainty from 2017Q1 to 2021Q3 measured by the World Trade Uncertainty (WTU) index. We show that trade uncertainty slows bank credit growth. We find no significant difference in the lending response to trade uncertainty between Chinese and EU banks. Our additional analyses indicate that the credit-reducing effect of trade uncertainty is stronger for better-capitalised banks and more liquid banks. We also find that trade uncertainty is negatively associated with the growth of different bank funding sources, namely, customer deposits, liabilities, and equity. However, we do not find significant evidence that trade uncertainty affects bank credit risk.
Keywords
Trade uncertainty , Banks , Credit growth , China , European union
Citation
Noordin, N. H., & Mohd Rasid, M. E. S. (2024). Trade uncertainty and bank credit growth: Evidence from China and the european union countries. Bulletin of Monetery Economics and Banking, 27(2), Article 5, 299-326. https://doi.org/10.59091/2460-9196.1961
Publisher
Bank Indonesia
Files
Trade_uncertainty_and_bank_credit_growth_evidence_from_China_and_the_european_union_countries_Mohamed Eskandar Shah Mohd_ Nazrul Hazizi Noordin.pdf
Size: 704.71 KBFormat: pdf
Views: 0 Downloads: 2