2011
DOI: 10.2139/ssrn.1888904
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Nonperforming Loans and Macrofinancial Vulnerabilities in Advanced Economies

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Cited by 83 publications
(102 citation statements)
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“…The CTI ratio, a proxy for management efficiency, decreases NPLs significantly. This supports the Berger and DeYoung (1997) "skimping hypothesis" that banks that assign fewer resources to assess credit risk are more cost-efficient, yet at the cost of increasing the level of NPLs in the future, consistent with the empirical findings of Chaibi and Ftiti (2015) and Nkusu (2011). The E/A ratio is found to negatively affect NPLs, which concurs with the findings of Zhang et al (2016).…”
Section: Multivariate Analysissupporting
confidence: 84%
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“…The CTI ratio, a proxy for management efficiency, decreases NPLs significantly. This supports the Berger and DeYoung (1997) "skimping hypothesis" that banks that assign fewer resources to assess credit risk are more cost-efficient, yet at the cost of increasing the level of NPLs in the future, consistent with the empirical findings of Chaibi and Ftiti (2015) and Nkusu (2011). The E/A ratio is found to negatively affect NPLs, which concurs with the findings of Zhang et al (2016).…”
Section: Multivariate Analysissupporting
confidence: 84%
“…This suggests that, during stable periods, the capability of borrowers to service their loans is as expected. Conversely, we find no evidence of inflation increasing NPLs, so we cannot support the argument that high inflation might cause loan servicing problems as a result of lower real incomes (Chaibi and Ftiti, 2015;Nkusu, 2011). Unemployment is found to increase NPLs, in line with the findings of previous studies (Chaibi and Ftiti, 2015;Makri et al, 2014).…”
Section: Multivariate Analysiscontrasting
confidence: 71%
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“…The findings suggest that both unemployment and inflation increase NPLs, while high real GDP growth rates have a negatively significant relationship with NPLs. Despite such research, Monokrousso and Gortsos (2017) and Nkusu (2011) reveal that the impact of inflation on the quality of bank assets is unknown. The higher inflation rate, and the lower real value of outstanding 1 debt, making servicing debt more easily.…”
Section: Macroeconomic Variables and Nplsmentioning
confidence: 99%
“…Banking distress in the form of nonperforming loans may occur due to changing volatility in macroeconomic conditions like growth rate, unemployment, inflation, and interest rate (Nkusu, 2011). Studies like Llewellyn, 2002 and Chaibi, 2016 have also pointed that along with macroeconomic conditions, bank or industry‐specific variables like banks' working strategy, credit distribution mechanism, incentives appeasement policies, and excessive use of banks for political motives also contribute toward nonperforming loans.…”
Section: Introductionmentioning
confidence: 99%