Economic Policy Uncertainty and Corporate Governance in Bank Risk Management

Since the 2008 global financial crisis, global commercial banks have faced increasingly complex economic environments marked by rising economic policy uncertainty (EPU) driven by events like the 2018 U.S.-China trade tensions and 2020 COVID-19 pandemic. While regulatory reforms such as Basel III aim to enhance banks' risk control capabilities, their effectiveness under high EPU remains underexplored. This study investigates the impact of corporate governance on bank risk and performance during periods of high EPU, and tests whether EPU moderates the relationship between corporate governance and bank outcomes. By examining how EPU shapes banking governance structures, risk management practices, and performance across diverse economic settings, this research seeks to fill gaps in understanding how economic uncertainty alters banks' strategic decisions, providing insights for strengthening banking stability and resilience in volatile environments.