The Impact of Climate Change, Agriculture Financing, and Bank Product Diversification on Bank Risk
Silviana Pebruary, Hadi Ismanto, Fatchur Rohman, Isna Amalia

Universitas Islam Nahdlatul Ulama Jepara

Abstract

The study aims to analyze climate change, agricultural sector financing, and product diversification on risk in Indonesian banking. This study used a sample of 34 banks listed on the Indonesian stock exchange, the data was taken from 2014 to 2023, and the total observations used were 1,288 bank trials. The data collected were analyzed using the FEM panel regression method. The results of the study revealed that climate change had a positive effect on the banking industry. On the other hand, the agricultural sector^s financing had a negative impact. The findings of this study contribute to understanding the link between financial stability and environmental factors. Banks should consider incorporating climate-based risk analysis in their credit decisions. They should also focus more on supporting stable sectors like agriculture.

Keywords: Bank_Risk - Climate_Change- Agriculture_Financing- Product_Diversification

Topic: Economics