Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Trade Deficit and Banking Sector Results in Romania and Bulgaria

Contents:

Author Info

  • Alenka Kavkler

    ()
    (Faculty of Economics and Business, University of Maribor, Slovenia and EIPF - Economic Institute, Ljubljana, Slovenia)

  • Mejra Festić

    (Faculty of Economics and Business, University of Maribor, Slovenia and EIPF - Economic Institute, Ljubljana, Slovenia)

Registered author(s):

    Abstract

    We tested for the significance of macroeconomic variables that condition non-performing loan ratios. Our estimates for Bulgaria and Romania support the hypothesis that the growth of available finance might harm banking performance and deteriorate NPL dynamics, most probably due to the overheating of economies. Since we confirmed that the dynamics of net exports of these economies deteriorated the NPL ratio, the weakening of growth in export-oriented industries could lead to economic contraction with a direct impact on the sustainability of banking-sector results in these countries. Large current account deficits are typical for emerging markets and do not pose a problem as long as they are caused by the importing of capital goods, and, if future export growth is strong enough to reimburse foreign debt. Structural dependence on external financing - which is in part a by-product of the effect of low levels of internal saving - have led to large current account deficits and financial instability.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.amfiteatrueconomic.ro/temp/Article_947.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Academy of Economic Studies - Bucharest, Romania in its journal The AMFITEATRU ECONOMIC journal.

    Volume (Year): 12 (2010)
    Issue (Month): 27 (February)
    Pages: 199-213

    as in new window
    Handle: RePEc:aes:amfeco:v:12:y:2010:i:27:p:199-213

    Contact details of provider:
    Postal: 6 ROMANA PLACE, 70167 - BUCHAREST
    Phone: 0040-01-2112650
    Fax: 0040-01-3129549
    Email:
    Web page: http://amfiteatrueconomic.ase.ro/
    More information through EDIRC

    Related research

    Keywords: cyclicality; non-performing loans; systemic risk; asset quality; economic growth;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. C.J.M. Kool, 2006. "An analysis of financial stability indicators in European banking: the role of common factors," Working Papers 06-12, Utrecht School of Economics.
    2. Petr Jakubik & Jaroslav Hermanek, 2007. "Credit Risk and Stress Testing of the Banking Sector of the Czech Republic," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2006, chapter 0, pages 57-68 Czech National Bank, Research Department.
    3. Berglöf, Erik & Roland, Gérard, 1995. "Bank Restructuring and Soft Budget Constraints in Financial Transition," CEPR Discussion Papers 1250, C.E.P.R. Discussion Papers.
    4. Gergely Kiss & Márton Nagy & Balázs Vonnák, 2006. "Credit Growth in Central and Eastern Europe: Convergence or Boom?," MNB Working Papers 2006/10, Magyar Nemzeti Bank (the central bank of Hungary).
    5. Costea, Carmen & Keen, Steve, 2009. "Romania In A Post-Credit Crunch World? A Cautionary Tale From Australia And America," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 16-35, March.
    6. Petr JAKUBÍK, 2007. "Macroeconomic Environment and Credit Risk (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(1-2), pages 60-78, March.
    7. Christoph Duenwald & Nikolay Gueorguiev & Andrea Schaechter, 2005. "Too Much of a Good Thing? Credit Booms in Transition Economies," IMF Working Papers 05/128, International Monetary Fund.
    8. Daianu, Daniel & Lungu, Laurian, 2008. "Why Is This Financial Crisis Occurring? How To Respond To It?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(4), pages 59-87, December.
    9. Garabed Minassian, 2008. "Is Bulgarian Economy Overheating?," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 21-46.
    10. Glenn Hoggarth & Andrew Logan & Lea Zicchino, 2005. "Macro stress tests of UK banks," BIS Papers chapters, in: Bank for International Settlements (ed.), Investigating the relationship between the financial and real economy, volume 22, pages 392-408 Bank for International Settlements.
    11. Brandmeier, Michael, 2006. "Reasons for real appreciation in Central Europe," Center for European, Governance and Economic Development Research Discussion Papers 55, University of Goettingen, Department of Economics.
    12. Garabed Minassian, 2008. "Is the Bulgarian Economy Overheating?," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 3-29.
    13. Brzoza-Brzezina, Michal, 2005. "Lending booms in the new EU Member States: will euro adoption matter?," Working Paper Series 0543, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Eftychia Nikolaidou & Sofoklis Vogiazas, 2014. "Credit Risk Determinants for the Bulgarian Banking System," International Advances in Economic Research, Springer, vol. 20(1), pages 87-102, February.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:aes:amfeco:v:12:y:2010:i:27:p:199-213. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valentin Dumitru).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.