Non-Performing Loans determinants: A new behavioural approach

Michael Giannoulakis

No 51102, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: This paper presents a comprehensive review of the literature on non-performing loans (NPLs) and their determinants, covering studies published between 1987 and 2025. In contrast to earlier reviews, it introduces a novel dichotomy that distinguishes between behavioural determinants, such as managerial practices, governance structures, and strategic decision-making, and non-behavioural determinants, including macroeconomic and systemic conditions. This classification provides a clearer conceptual framework for understanding the processes underlying NPL formation and dynamics. Beyond synthesising prior evidence, the paper highlights key trends in the literature, documents the growing academic and policy attention devoted to NPLs, and identifies critical gaps. In particular, it calls for deeper analysis of behavioural drivers, cross-country comparative studies, and the interaction between financial innovation and credit risk. By providing both synthesis and direction, this review offers an updated and structured resource for researchers, policymakers, and practitioners concerned with credit risk and financial stability.

Keywords: Non-performing loans; credit risk; banking sector; macroeconomic determinants; governance; financial stability (search for similar items in EconPapers)
Date: 2025-07-15
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https://gala.gre.ac.uk/id/eprint/51102/3/51102%20G ... %28Draft%29_2025.pdf

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