How Do Non-Performing Loans Evolve along the Economic Cycle? The Role of Macroeconomic Conditions and Legal Efficiency
The reports about increased insolvency risk during the recent COVID-19 pandemic highlight the importance of banks’ balance sheet resilience. In times of crisis, regulators are most concerned about the build-up of non-performing loans (NPLs) – many historical examples show that excessive levels of NPLs can seriously endanger financial stability (e.g., in Japan, Italy, Mexico, or Asia). Evidence from the… Read More »
