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Impact of Macroeconomic and Endogenous Factors on Non-Performing Bank Assets

Vighneswara Swamy ()

MPRA Paper from University Library of Munich, Germany

Abstract: Determinants of default risk of banks in emerging economies have so far received inadequate attention in the literature. Using panel data techniques, this paper seeks to examine the impact of macroeconomic and endogenous factors on non-performing assets for the period from 1997-2009. The findings of the study reveal some interesting inferences contrary to the perception of few opinion makers. Lending Rates have been found to be not so significant in affecting the NPAs contrary to the general perception Bank Assets has turned out to be negatively significant indicating that large banks may have better risk management procedures and technology which definitely allows them to finish up with lower levels of NPAs. Further, this study has established that private banks and foreign banks have advantages in terms of their efficiencies in better credit management in containing the NPAs that indicates that bank privatization can lead to better management of default risk.

Keywords: Banks; Risk Management; Ownership Structure; Financial Markets; Non-Performing Assets; Lending Policy; Macro-economy; Central Banks (search for similar items in EconPapers)
JEL-codes: E44 E51 G21 G32 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ban, nep-mac and nep-rmg
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Published in International Journal of Banking and Finance 1.9(2012): pp. 27-47

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https://mpra.ub.uni-muenchen.de/47517/1/MPRA_paper_47517.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/49600/1/Non-performing%20bank%20assets.pdf revised version (application/pdf)

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