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Erratum to: Cover your assets: non-performing loans and coverage ratios in Europe

Author

Listed:
  • Lucia Alessi
  • Brunella Bruno
  • Elena Carletti
  • Katja Neugebauer
  • Isabella Wolfskeil

Abstract

SUMMARYWe analyse the determinants of coverage ratios and their components [non-performing loans (NPLs) and loss loan reserves] in a large sample of European banks. We find that bank-specific factors, particularly credit risk variables (including forward-looking indicators) and capitalization, matter the most. Coverage ratios adjust insufficiently as asset quality deteriorates, except in high-NPL banks. Capitalization has a positive effect on coverage ratio, pointing to a complementarity between the two buffers. At the country level, specific macroprudential levers and developing NPL secondary markets enhance coverage ratios. Our findings emphasize the importance of micro oversight and call for more stringent macro policies in high-NPL countries.
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Suggested Citation

  • Lucia Alessi & Brunella Bruno & Elena Carletti & Katja Neugebauer & Isabella Wolfskeil, 2021. "Erratum to: Cover your assets: non-performing loans and coverage ratios in Europe," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(108), pages 775-775.
    • Handle: RePEc:oup:ecpoli:v:36:y:2021:i:108:p:775-775.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiab018
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    Cited by:

    1. Renata Karkowska & Zbigniew Korzeb & Anna Matysek & Paweł Niedziółka, 2025. "Governance, business model and size as drivers of loan’s portfolio management and provisioning in European banks," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(3), pages 590-609, September.
    2. Fan, Wenna & Wang, Feng & Zhang, Hao & Yan, Bin & Ling, Rui & Jiang, Hongfei, 2024. "Is climate change fueling commercial banks’ non-performing loan ratio? Empirical evidence from 31 provinces in China," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    3. Yue Zhang, 2023. "Speed for Safety: The Establishment of Bankruptcy Courts and Bank Credit Risk in China," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(6), pages 1-2.
    4. Oren Mooneeapen & Phillip de Jager, 2025. "A global snapshot on the cyclicality of provisions: unveiling IFRS 9’s impact," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(3), pages 518-530, September.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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