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Non-Performing Loans in CESEE: Determinants and Impact on Macroeconomic Performance
Author:
Nir Klein
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Series:
IMF Working Papers
Volume/Issue:
Volume 2013: Issue 072
Language:
English
Publication Date:
20 Mar 2013
DOI:
https://doi.org/10.5089/9781484318522.001
ISBN:
9781484318522
ISSN:
1018-5941
Pages:
27
Keywords:
WP; bank; return on equity; GDP; Macrofinancial linkages; non-performing loans; credit growth; feedback effects; data quality; NPLS ratio; NPL shock; NPLS problem; GDP growth; NPLS result; Nonperforming loans; Inflation; Loans; Credit; Commercial banks; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2013: Issue 072