How did rapid credit growth cause non-performing loans in the CEE Countries?

This paper investigates the influence of three types of credit growth on non-performing loans in eleven Central and Eastern European countries during the period from 1999 to 2013. As opposed to previous research on credit risk, we have moved the focus from the usually investigated bank-specific and...

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Bibliographic Details
Published in:South East European journal of economics and business 2017-12, Vol.12 (2), p.73-84
Main Authors: Peric, Blanka Skrabic, Konjusak, Nikola
Format: Article
Language:English
Subjects:
Banking industry
Banks
C23
CEE countries
Credit Growth
Credit risk
Data models
Dynamic Panel Data
Econometrics
Economic crisis
Economic growth
Economic models
Economics
G21
G32
GDP
Gross Domestic Product
Industrialized nations
Loan losses
Loans
Macroeconomics
Non-Performing Loans
Nonperforming loans
Regulation of financial institutions
Systems stability
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Summary:This paper investigates the influence of three types of credit growth on non-performing loans in eleven Central and Eastern European countries during the period from 1999 to 2013. As opposed to previous research on credit risk, we have moved the focus from the usually investigated bank-specific and macroeconomic variables to different types of credit growth from earlier periods. At the same time, the results of this research give answer on the studies before the crisis, which tried to determine the possible consequences of rapid credit growth in the CEE countries. The results indicate that at least two years are necessary for each type of credit growth to increase credit risk. Finally, empirical results confirm the importance of both bank-specific and macroeconomic variables.
ISSN:2233-1999
2233-1999
DOI:10.1515/jeb-2017-0019