Non performing loans (NPLs) in a crisis economy: Long-run equilibrium analysis with a real time VEC model for Greece (2001–2015)

Michaelides, Panayotis G.; Vouldis, Angelos T.

doi:10.1016/j.physa.2015.12.163

Cited by 55 publications

(47 citation statements)

References 34 publications

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“…Beck et al (2015) used a number of national samples to analyze the influence of macroeconomic factors on non-performing loans, and found that real GDP growth, stock prices, exchange rates, and interest rates greatly decrease the scale of non-performing loans, while the negative effect of the stock is stronger in developed countries [20]. Konstantakis et al (2016) used the characteristics of the economic crisis to analyze the determinants of non-performing loans, and pointed out that macroeconomic factors and financial factors could significantly change the scale of banks' non-performing loans [21]. According to the macroeconomic analysis, some indicators of the regional economy and the financial market provide a certain relationship with the non-performing loans.…”

Section: Non-performing Loansmentioning

confidence: 99%

Impacts of Financial Inclusion on Non-Performing Loans of Commercial Banks: Evidence from China

2018

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Non-performing loans of commercial banks have long hampered the development of the banking sector, and directly reflect the credit risk and asset quality. With the continuous development of the financial industry, the introduction of financial inclusion has greatly eased the shortage of funds, and narrowed the gap between poor and rich. However, whether the promotion of financial inclusion in the financial industry could affect the non-performing loans of commercial banks has not been verified. Therefore, this paper discusses the possible associations between financial inclusion and non-performing loans of commercial banks on the regional level, constructs a panel data model by selecting the data of 31 provinces (including 4 municipalities) in China from 2005 to 2016, and uses the fixed effect model for empirical test. The empirical results (from an overall national sample) reveal a negative impact of the financial inclusion on non-performing loans. Moreover, the development of the banking sector and the regional consumption could enhance the impact of financial inclusion, while government intervention and unemployment could reduce the impact of financial inclusion. From the analysis of the regional sample, when the development of financial inclusion reaches a high level, the lagged financial inclusion promote the non-performing loans of commercial banks; however, when the financial inclusion is underdeveloped, the development of commercial banks act as a disincentive to non-performing loans. Therefore, the local governments should pay more attention to the influences of financial inclusion on the financial industry, in order to maintain the stability of banking asset quality. In addition, the negative impact of financial inclusion on non-performing loans of commercial banks is significant in China central region, while its impacts in China eastern and western regions are not significant. This indicates that the development of the financial industry and economy can hamper the effects of financial inclusion. It is necessary to adjust the financial resource allocation according to the characteristics of different regions in China, so that the financial inclusion can effectively promote the regional financial industry upgrade, improve regional capital flow efficiency, and fundamentally reduce the non-performing loans of commercial banks. According to the sample analysis by time, there is a significant negative impact relationship between inclusive finance and commercial banks’ non-performing loans after the financial crisis, while the impacts before and during the financial crisis are not significant. This demonstrates that the impact of the global financial crisis on China’s regional economy has further enhanced the inefficiency of the inclusive financial system on credit risk, which in turn, helps commercial banks better maintain asset quality stability.

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Section: Non-performing Loansmentioning

confidence: 99%

Impacts of Financial Inclusion on Non-Performing Loans of Commercial Banks: Evidence from China

2018

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“…There are many studies focusing on the problem of the default rate of loans in the banking sector, most of which are focused on the relationship between macroeconomic determinants and NPLs [4][5][6]. A number of studies are devoted to the fact that the effect of macroeconomic conditions on the level of non-performing loans can be significant [7][8][9].…”

Section: Introductionmentioning

confidence: 99%

Impact of National Economic Conditions on the Level of Non-Performing Loans in the Commercial Banks of Cyprus

Ptasica¹

2020

Proceedings of the “New Silk Road: Business Cooperation and Prospective of Economic Development” (NSRBCPED 2019)

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The purpose of this paper is to assess and analyse the impact of the national economic conditions on the Level of Non-performing loans (NPLs) in the Commercial banks of Cyprus, as well as determine the nature and magnitude of relationship between them. The object of this study is the existing scientifically based theoretical approaches to the study of non-performing loans, as well as economic processes that affected the dynamic of those loans. The paper reviews the impact of the changes in national economic conditions on the Level of Non-performing loans in the Commercial banks of Cyprus between 2005 and 2018. The national economic conditions studied include: Public Debt, Budget Balance and Interest Rate. The results of this study confirms that statistically significant linear dependency exists between Public Debt, Interest Rate and NPLs in Cyprus. In turn, the study confirms that there is not enough evidence to prove that statistically significant linear dependency exists between Budget Balance and NPLs in Cyprus.

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“…NPLs are positively correlated to unemployment, whereas they are negatively correlated to GDP growth rate and inflation [49]. Furthermore, NPLs are positively correlated to macroeconomic and financial disequilibriums, as well as to the government's fund-raising capacity [50]. Figure 2 confirms that during the crisis, NPLs in Greece increased from 5.7% to 45.4% of total lending, unemployment increased from 7.76% to 26.49%, GDP decreased from 241 billion EUR to 180 billion EUR and there was also deflation.…”

Section: Non-performing Loansmentioning

confidence: 99%

Do Economic Adjustment Programmes Set Conflicting Objectives? The Case of Greece

Liargovas¹,

Psychalis²

2019

TEL

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Certain EU countries could not counter the effects of the 2008 global financial crisis. As a result, they lost access to international markets. The EU attempted to resolve the European financial crisis by implementing economic adjustment programmes. Economic adjustment programmes included financing conditional on the implementation of reforms. All programmes consisted of three main pillars: Fiscal consolidation, financial stability, and promoting growth and competitiveness. This article examines whether the objectives set under each pillar were in conflict with or complementary to the objectives set under other pillars. Studying the case of Greece, it is concluded that certain economic adjustment programme objectives and policies were indeed conflicting, rendering their implementation harder.

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Non performing loans (NPLs) in a crisis economy: Long-run equilibrium analysis with a real time VEC model for Greece (2001–2015)

Cited by 55 publications

References 34 publications

Impacts of Financial Inclusion on Non-Performing Loans of Commercial Banks: Evidence from China

Impacts of Financial Inclusion on Non-Performing Loans of Commercial Banks: Evidence from China

Impact of National Economic Conditions on the Level of Non-Performing Loans in the Commercial Banks of Cyprus

Do Economic Adjustment Programmes Set Conflicting Objectives? The Case of Greece

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