Suchergebnisse

The Croatian banking sector is still burdened with a high portion of Non-Performing Loans, which must be resolved in order to support normalized credit conditions in the economy. With Non-Performing Loans (NPL) amounting to 16.6 of total loans at the end of 2015 and as much as 30 of loans in the corporate sector, Croatia has one of the highest levels of NPLs across the European Union. High stock of NPLs poses a significant strain on the Croatian financial system and resolving NPLs is essential to strengthen the financial system and restore normalized lending. From the perspective of borrowers, resolving unsustainable debt levels and restoring credit is equally vital to business recovery and economic growth. The European Commission Country Report Croatia 2016 highlights that the high stock of NPLs remains a challenge for the banking sector and the Council opinion on the 2016 National Reform Programme of Croatia recommends that the government facilitate the resolution of NPLs, and in particular by improving the tax treatment of the resolution of non-performing loans.

Financial intermediation by banks is an engine of growth because they cause money to be circulated in the economy by seeking deposits from those who have surplus and lend for investment activity. It has a multiplier effect in the economy! Borrowing leads to creation of demand for productive resources and increases the income level of those who supply goods and services. Expenditure of one is income of the t other. This leads to higher GDP and faster productive growth. Contraction in lending has opposite effect and growth falters. One major reason for muted credit growth is fast accretion of Non Performing Assets (NPAs) on banks' balance sheets. Roughly 72 per cent of market share of outstanding credit of SCBs (Scheduled Commercial Banks) is of PSBs. Meteoric rise of NPAs from Sept 15 had its genesis in rapid credit growth of banks during the preceding years say from 2008 onwards. During the period of 2008 to 2014 gross advances of public sector banks grew from Rs. 18 lakh crores to Rs. 54 lakh crores and by September 17 this figure was Rs. 55.01 lakh crores. No wonder that the share of sticky assets of government owned banks in this pile of bad loan is almost 90 per cent.Classification-JEL : A 14, E 44, E 58

PurposeThe distinction between systemic banks (GSIBs) and non-systemic banks (non-GSIBs) is driven by policy reasons. This study aims to examine the behaviour of non-performing loans in European GSIBs and non-GSIBs from 2004 to 2013.Design/methodology/approachThe author uses regression methodology to analyse the association between non-performing loans (NPLs) and the state of the economy.FindingsThe author finds that more profitable banks witness higher NPLs regardless of them being systemic or non-systemic. Secondly, GSIBs have fewer NPLs during economic booms and during periods of increased lending, while non-GSIBs experience higher NPLs during periods of increased lending. The author also observes that European non-GSIBs that exceed regulatory capital requirement also experience higher NPLs. In the post-crisis period, there is a significant and negative relationship between NPLs and the economic cycle for GSIBs in the post-financial crisis period and a significant and positive relationship between NPLs, loan supply and bank profitability for GSIBs in the post-financial crisis period; on the other hand, there is a significant and negative relationship between NPLs and regulatory capital ratios for non-GSIBs in the post-financial crisis period and a significant and positive relationship between NPLs and bank profitability for non-GSIBs in the post-financial crisis period. The findings have implications.Originality/valueTo the best of the author's knowledge, the literature on the determinants of NPL has not empirically examined the behaviour of NPLs in European GSIBs and non-GSIBs. This paper examines this issue to provide insights to help policymakers and academics understand the peculiarities of NPLs in Europe.

The primary goal of this paper is to confirm the existence of the links and receive the quantitative measurement of the correlation between the quality of institutions and dynamics of their development, on the one hand, and GDP growth, on the other. For this analysis the extended database consisting of basic macroeconomic indicators and indices of quality of institutions for 51 countries for the period 2001-2009 was used. This study provides quantitative support to the common notion that economic growth in the long run is affected by the quality of institutions. Though this numeric effect may be viewed as relatively small, in the medium run the accumulated gap in the growth rate caused by permanently lower quality of institutions can be substantial. Moreover, the radical improvement in the quality of institutions provides more significant, though not lasting, addition to the growth rate.