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The Roots of the Banking Crisis in the New EU Member States: A Panel Regression Approach

  • Festic, Mejra

    ()

    (EPF - Faculty of Economics and Business, University of Maribor; EIPF - Economic Institute, Ljubljana. SLOVENIA)

  • Kavkler, Alenka

    ()

    (EPF - Faculty of Economics and Business, University of Maribor; EIPF - Economic Institute, Ljubljana. SLOVENIA)

Registered author(s):

    We contributed to the empirical evidence of the impact of macroeconomic environment on the non-performing loans (NPL) ratio dynamics by analyzing the panel model with fixed effects, the model with random effects and instrumental variable regressions to control for a potential endogeneity problem. Economic and consumption growth proved to be positively correlated with the business cycle in the ten new EU member states (NMS-10), which raised the quality of the loan portfolio. Compliance with the Basel Core Principles was shown to improve the NPL ratio dynamics.

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    File URL: http://www.ipe.ro/rjef/rjef1_12/rjef1_2012p20-40.pdf
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    Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

    Volume (Year): (2012)
    Issue (Month): 1 (March)
    Pages: 20-40

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    Handle: RePEc:rjr:romjef:v::y:2012:i:1:p:20-40
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