The Dynamics of Non-Performing Loans during Banking Crises: A New Database

Anil Ari, Sophia Chen () and Lev Ratnovski ()

No 2019/272, IMF Working Papers from International Monetary Fund

Abstract: This paper presents a new dataset on the dynamics of non-performing loans (NPLs) during 88 banking crises since 1990. The data show similarities across crises during NPL build-ups but less so during NPL resolutions. We find a close relationship between NPL problems—elevated and unresolved NPLs—and the severity of post-crisis recessions. A machine learning approach identifies a set of pre-crisis predictors of NPL problems related to weak macroeconomic, institutional, corporate, and banking sector conditions. Our findings suggest that reducing pre-crisis vulnerabilities and promptly addressing NPL problems during a crisis are important for post-crisis output recovery.

Keywords: WP; NPL resolution; peak npls; NPL dynamics; elevated npls; NPL ratio; peak NPL; elevated NPL; banking crisis; Nonperforming loans; Banking crises; Loans; Global; Asia and Pacific; Europe (search for similar items in EconPapers)
Pages: 40
Date: 2019-12-06
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: The Dynamics of Non-Performing Loans during Banking Crises: A New Database (2020)
Working Paper: The dynamics of non-performing loans during banking crises: a new database (2020)
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