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What Triggers Loan Losses? An Empirical Investigation of Greek Financial Sector

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  • Vasiliki Makri

    (Research Associate, Department of Business Administration, University of Patras)

Abstract

The aim of this study is to investigate which factors influence loan quality in Greece. In this context, it is examined the effect of various accounting and macroeconomics indices to loans loss provisions (LLP) and loans loss reserves (LLR) ratios. The empirical analysis is carried out at both individual bank and banking system level data by using dynamic regression techniques. The findings extend the existing literature and confirm all the examined hypotheses, since macroeconomic environment (unemployment, public debt, economic growth and inflation) and accounting factors (past performance of loan quality, capital adequacy, liquidity and profitability) seem to influence credit risk in Greece.

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  • Vasiliki Makri, 2015. "What Triggers Loan Losses? An Empirical Investigation of Greek Financial Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 65(3-4), pages 119-143, july-Dece.
    • Handle: RePEc:spd:journl:v:65:y:2015:i:3-4:p:119-143
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    Cited by:

    1. Karadima, Maria & Louri, Helen, 2021. "Determinants of non-performing loans in Greece: the intricate role of fiscal expansion," LSE Research Online Documents on Economics 110741, London School of Economics and Political Science, LSE Library.
    2. Kolliopoulos, Athanasios, 2021. "Reforming the Greek financial system: a decade of failure," LSE Research Online Documents on Economics 108523, London School of Economics and Political Science, LSE Library.
    3. Athanasios Kolliopoulos, 2021. "Reforming the Greek Financial System: a decade of failure," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 155, Hellenic Observatory, LSE.
    4. Vasiliki Makri, 2016. "Towards an Investigation of Credit Risk Determinants in Eurozone Countries," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(1), pages 27-57, March.
    5. Vasiliki MAKRI & Konstantinos PAPADATOS, 2016. "Determinants Of Loan Quality: Lessons From Greek Cooperative Banks," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 115-140, June.

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    More about this item

    Keywords

    Credit Risk; Loan Quality; Loan Loss Provisions; Loan Loss Reserves; Accounting Factors; Macroeconomic Factors.;
    All these keywords.

    JEL classification:

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

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