Influence of digital transformation on banks’ systemic risk in China

This study measures the systemic risk of 183 listed and unlisted commercial banks in China from 2010 to 2021 using machine learning algorithms to investigate the influence of digital transformation on banks' systemic risk, finding that digital transformation has an inverted U-shaped influence on banks' systemic risk. Risk-taking and noninterest income have important mediating roles. High regional digitalization can weaken the effect of digital transformation on banks' systemic risk, whereas market concentration has an opposite moderating effect. The results presented in this paper are of particular importance for regulatory authorities to improve the systemic risk prevention of banks.