Year: 2014
Type: article
Abstract: The purpose of the present study is to identify the factors affecting the non-performing loans rate (NPL) of Eurozone?s banking systems for the period 2000-2008, just before the beginning of the recession. In our days, Eurozone is in the middle of an unprecedented financial crisis, calling into question the soundness of the banking systems of European countries. Looking at both macro-variables (e.g. annual percentage growth rate of gross domestic product, public debt as % of gross domestic product, unemployment) and micro-variables (e.g. loans to deposits ratio, return on assets, return on equity), we investigate which factors determine NPL on aggregate level. Overall, our findings reveal strong correlations between NPL and various macroeconomic (public debt, unemployment, annual percentage growth rate of gross domestic product) and bank-specific (capital adequacy ratio, rate of nonperforming loans of the previous year and return on equity) factors.
Source: Panoeconomicus
DOI: 10.2298/pan1402193m
Institution: University of Patras
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W2002169993