Research on Impact of Macroeconomic Uncertainty on Credit Supply of Commercial Banks in China

Compared with the developed countries, the development of the capital markets in China are relatively backward. And indirect financing based on bank credit is still the main way of social financing. A lot of uncertain factors of the international markets have interposed in Chinese domestic markets, which increasing the uncertainty of the macroeconomic, with the deepening of China's reform and opening-up policy. This study applies GARCH model to measures the uncertainty of Chinese macroeconomic and panel data model to analyze the impact of macroeconomic uncertainty on the credit supplies of commercial banks. The results show that macroeconomic uncertainty has a significant negative impact on the credit supplies of commercial banks in China and a greater impact on unlisted commercial banks than listed banks. Besides, negative effects of macroeconomic uncertainty on the credit supplies of commercial banks can be reduced by improving the confidence of entrepreneurs in the future investment. In addition, the improvement of profitability of commercial banks can help to reduce the impact of macroeconomic uncertainty on its credit supplies, but the degree of decrease was weak.