What drives forbearance - evidence from the ECB Comprehensive Assessment

Carmelo Salleo, Timotej Homar () and Heinrich Kick

No 1860, Working Paper Series from European Central Bank

Abstract: Forbearance is a practice of granting concessions to troubled borrowers, typically in the form of prolongation of maturity or refinancing of the loan. While economically useful in some circumstances, it can be used by banks in order to reduce the need for provisions and conceal potential losses. If forbearance is widespread in the banking system, it may result in systemic risk, increasing uncertainty about the quality of banks JEL Classification: G21, G28

Keywords: Asset Quality Review; forbearance; nonperforming loans; zombie lending (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-eec and nep-rmg
Note: 1654951
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20151860

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