Non-Performing Loans in CESEE: Determinants and Impact on Macroeconomic Performance

March 20, 2013

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Format: Chicago

Nir Klein. Non-Performing Loans in CESEE: Determinants and Impact on Macroeconomic Performance, (USA: International Monetary Fund, 2013) accessed December 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper investigates the non-performing loans (NPLs) in Central, Eastern and South-Eastern Europe (CESEE) in the period of 1998–2011. The paper finds that the level of NPLs can be attributed to both macroeconomic conditions and banks’ specific factors, though the latter set of factors was found to have a relatively low explanatory power. The examination of the feedback effects broadly confirms the strong macro-financial linkages in the region. While NPLs were found to respond to macroeconomic conditions, such as GDP growth, unemployment, and inflation, the analysis also indicates that there are strong feedback effects from the banking system to the real economy, thus suggesting that the high NPLs that many CESEE countries currently face adversely affect the pace economic recovery.

Subject: Banking, Commercial banks, Credit, Financial institutions, Inflation, Loans, Money, Nonperforming loans, Prices

Keywords: Bank, Commercial banks, Credit, Credit growth, Data quality, Feedback effects, GDP, GDP growth, Global, Inflation, Loans, Macrofinancial linkages, Non-performing loans, Nonperforming loans, NPL shock, NPLS problem, NPLS ratio, NPLS result, Return on equity, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/072
Stock No:

WPIEA2013072
ISBN:

9781484318522
ISSN:

1018-5941

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