Identification of consumers willing to buy green products – A case study in the Czech Republic

Environmental, social, and governance (ESG) development has indeed changed the original economic operation status through diversified methods. The banking industry, especially under the guidance of ESG, reminds the banking industry that it should focus on regulatory conditions such as lending objects with ESG operating characteristics. In terms of corporate governance, the banking industry needs to adopt high self-management standards for business development. This paper uses the panel threshold model to measure the regional moral hazard of 30 firms in the Taiwan bank industry from 2007 to 2018. The research shows that banks with high regional loan concentration ratios have evidence of moral hazard and a significant asymmetric effect in the regional loan concentration ratio in the bank industry. Based on this, the bank’s high regional (NPL ratio) is used to measure the level of the bank’s credit risk and quality of outstanding loans, which requires strengthening loan quality, the optimum concentration of loan weight, promoting the establishment of the effectiveness of the ownership structure and enhancing the development of management ability. Due to Taiwan’s banking industry’s overly competitive business environment, loan concentration and moral hazard lending practices have emerged. There is an apparent correlation between the development of the banking industry and an extremely competitive business environment. Therefore, how to have healthy competition in the banking industry instead of vicious competition is worth learning from other countries. This paper argues that creating a competitive banking environment is crucial. To target loan recipients, the banking industry should leverage its business expertise, integrity, and business ethos in line with international trends, such as ESG development trends. Regarding corporate governance, banks should be able to use equity structures, compensation system management, and internal management measures to establish more competitive professional banks.