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The macroeconomic sources of systemic risk in the banking sectors of five new EU member states

  • Festic, Mejra
  • Kavkler, Alenka
  • Repina, Sebastijan
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    Rapid credit growth has been one of the most pervasive developments in recent years in Central and Eastern Europe. Our estimates support the hypothesis that the growth of credit and the amount of available finance might harm banking performance and deteriorate non-performing loans (NPL) dynamics, most probably due to the overheating of economies in the five NMSs. The procyclicality of banking sector performance and high economic activities growth is a signal of an economy overheating and therefore a slowdown in economic activity is likely to accelerate the growth of the NPL ratio.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0378-4266(10)00308-0
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    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 35 (2011)
    Issue (Month): 2 (February)
    Pages: 310-322

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    Handle: RePEc:eee:jbfina:v:35:y:2011:i:2:p:310-322
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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