Study on the Effect of Extreme Weather on Bank Credit Risk

Abstract

In the global economic landscape, the potential impact of extreme weather issues on banks has attracted much attention. This study focuses on the impact of extreme weather on the credit risk of A-share listed banks and explores its role in financial stability. Given China's significant position in the global economy, analyzing the credit risk faced by its banking sector has both theoretical and practical value. By synthesizing bank financial data, weather records and macroeconomic indicators, this study quantifies the potential impact of extreme weather events on bank credit risk, taking into account the moderating effects of heterogeneity among bank types and regional bank competition. The results reveal the existence of an association between extreme weather and bank credit risk-taking and provide a basis for bank risk management and regulatory policies.