Deflation,bank credit growth,and non-performing loans: Evidence from Japan |
| |
Affiliation: | 1. National Technical University of Athens, Greece;2. European Central Bank & Bank of Greece, Greece;1. Kadir Has University, Faculty of Management, Istanbul, Turkey;2. Istanbul Medeniyet University, Faculty of Tourism, Istanbul, Turkey;3. University of Social Sciences, Lodz, Poland |
| |
Abstract: | In this paper, I examine the link between bank credit growth and non-performing loans in an economy with deflationary pressures. Using panel OLS regressions and two-step GMM regressions, I find evidence for the time-varying relationship between bank credit growth and non-performing loans in a sample of 82 publicly listed commercial banks in Japan during the period 1993–2013. I show that bank credit growth positively correlates with non-performing loans prior to the onset of the global financial crisis of 2007 but negatively correlates with non-performing loans afterwards. I find evidence to support the notion that large banks drive the observed effects of credit growth on non-performing loans. In addition, credit growth and non-performing loans have no effect on profitability. Overall, the findings suggest that while the increase in the supply of bank loans increases the level of non-performing loans, it does not lead to higher profitability. |
| |
Keywords: | |
本文献已被 ScienceDirect 等数据库收录! |
|