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

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

No GRU_2020_011, GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit

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: non-performing loans; debt; banking crises; recessions; crisis resolution (search for similar items in EconPapers)
JEL-codes: E32 E44 G21 N10 N20 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2020-05-06
New Economics Papers: this item is included in nep-fdg, nep-his and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232020-011%20Ratnovski.pdf (application/pdf)

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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cth:wpaper:gru_2020_011

Access Statistics for this paper

More papers in GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit Contact information at EDIRC.
Bibliographic data for series maintained by GRU ( this e-mail address is bad, please contact ).