The dynamics of non-performing loans during banking crises: a new database

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

No 2395, Working Paper Series from European Central Bank

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. JEL Classification: E32, E44, G21, N10, N20

Keywords: banking crises; crisis resolution; debt; non-performing loans; recessions (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-big, nep-cmp, nep-fdg, nep-his and nep-mac
Note: 3402164
References: View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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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 (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20202395

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