Climate Risk and Commercial Bank Liquidity Creation: An Empirical Study Based on the Dual Perspectives of Digital Transformation and Deposit Insurance

The liquidity creation function of commercial banks is crucial for financial market stability and real economic growth. This study examines how climate physical risks and climate transition risks, respectively, affect the liquidity creation of commercial banks. The findings indicate that physical risks increase bank liquidity creation, while transition risks reduce it. Deposit insurance significantly mitigates the enhancing effect of climate physical risks on liquidity creation. Transition risks indirectly weaken their inhibitory impact on liquidity creation by reducing banks’ digital transformation. Banks with different asset sizes exhibit heterogeneous characteristics. This research not only enriches the theoretical framework in this field but also provides practical guidance for commercial banks to address climate risks and optimize liquidity management strategies.