DETERMINANTS OF LOAN QUALITY: LESSONS FROM GREEK COOPERATIVE BANKS

Vasiliki Makri () and Konstantinos Papadatos ()
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Vasiliki Makri: Department of Business Administration, University of Patras, University Campus, 26504, Rio, Achaia, Greece
Konstantinos Papadatos: Patras Custom House, General Secretariat of Public Revenue, Ministry of Finance, Ierotheou 2 and Akti Dymeon, Patras, 26222, Achaia, Greece

Review of Economic and Business Studies, 2016, issue 17, 115-140

Abstract: The article focuses on the credit risk of cooperative banks in Greece. The main objective is to define which factors are responsible for variations in loan quality during the period 2003-2014. Loan quality is measured by Loan Loss Reserves Ratio (LLR) and dynamic regression techniques are implemented for the econometric estimations. The outlined results suggest that the macroeconomic environment (i.e. public debt, local unemployment, economic activity and inflation) and the accounting ratios (i.e. past loan quality and profitability) seem to be the explanatory variables of problem loans.

Keywords: credit risk; loan quality; loan loss reserves; accounting factors; macroeconomic environment and generalized methods of moments (search for similar items in EconPapers)
JEL-codes: C23 G21 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:aic:revebs:y:2016:j:17:makriv

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