What is it about?
The deterioration of the loan quality can result in significant losses for banks, and hence, may even cause the inception of a banking crisis. We show that there exists consistent and strong long-run cointegrating relationship among the nonperforming loans, macroeconomic variables and bank-specific factors. However, the short-term causal relationships are considerably limited, and, where they exist, especially unidirectional.
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Why is it important?
We considers two distinct types of determinants, namely macroeconomic (overnight lending interest rate of CBRT, unemployment rate, inflation rate, GDP per capita, and current account deficit) and bank-specific determinants (volume of individual loans, volume of bankcards and total saving deposits). In addition, this paper focuses on the Turkish banking system, which may be considered to represent a benchmark for strong recovery in the period following the 2000-2001 banking crisis.
Perspectives
This article is appealing as it focuses on the determinants of a niche type of loans, namely, NPLs.
İsmail Cem Özgüler
Izmir Ekonomi Universitesi
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This page is a summary of: Short Term and Long Term Linkages among Nonperforming Loans, Macroeconomic and Bank-Specific Factors: An Empirical Analysis for Turkey, Ege Akademik Bakis (Ege Academic Review), July 2015, Ege Akademik Bakis (Ege Academic Review),
DOI: 10.21121/eab.2015317971.
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