IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v55y2019i10p2275-2297.html
   My bibliography  Save this article

Regulations, Governance, and Resolution of Non-Performing Loan: Evidence from an Emerging Economy

Author

Listed:
  • Abu S. Amin
  • Mahmood Osman Imam
  • Mahfuja Malik

Abstract

How do banks resolve a severe bad loan problem in a capital-constrained, low-income economy when a government bailout is not an option? We address this question by examining new evidence from a sharp decline in bad loan ratios in a panel of conventional commercial banks in Bangladesh. On the aggregate level, the bad loan ratio in this market has dropped from 41% in 1999 to only 10% in 2012. We find that at a micro level, this dramatic improvement is associated with bank management quality and internal governance that were substantially enhanced during a decade of large-scale regulatory reforms. The bank-level findings persist even after controlling for market monitoring, bank- and industry-level factors, and macroeconomic variables. Both economic growth and financial development paved the way for banks operating in this macroeconomic environment to reduce non-performing loans over time.

Suggested Citation

  • Abu S. Amin & Mahmood Osman Imam & Mahfuja Malik, 2019. "Regulations, Governance, and Resolution of Non-Performing Loan: Evidence from an Emerging Economy," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(10), pages 2275-2297, August.
    • Handle: RePEc:mes:emfitr:v:55:y:2019:i:10:p:2275-2297
    DOI: 10.1080/1540496X.2018.1523788
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2018.1523788
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2018.1523788?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Shakeel Ahmed & M. Ejaz Majeed & Eleftherios Thalassinos & Yannis Thalassinos, 2021. "The Impact of Bank Specific and Macro-Economic Factors on Non-Performing Loans in the Banking Sector: Evidence from an Emerging Economy," JRFM, MDPI, vol. 14(5), pages 1-14, May.
    2. Wan-Li Zhang & Chun-Ping Chang & Yang Xuan, 2022. "The impacts of climate change on bank performance: What’s the mediating role of natural disasters?," Economic Change and Restructuring, Springer, vol. 55(3), pages 1913-1952, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:55:y:2019:i:10:p:2275-2297. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.