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The Correlation of Nonperforming Loans between Large and Small Banks

Author

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  • Hugo Rodríguez Mendizábal

Abstract

This short paper presents a new stylized fact about bank nonperforming loans. According to the data for the US, the average of the ratio of noncurrent loans to total loans for large banks presents a very high negative correlation with the same ratio for small banks. This result remains valid for different measures of bank size as well as controlling for different bank characteristics such as charter class, specialization or geographical location.

Suggested Citation

  • Hugo Rodríguez Mendizábal, 2014. "The Correlation of Nonperforming Loans between Large and Small Banks," Working Papers 789, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:789
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    References listed on IDEAS

    as
    1. Hubert P. Janicki & Edward Simpson Prescott, 2006. "Changes in the size distribution of U.S. banks: 1960-2005," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 92(Fall), pages 291-316.
    2. Vicente Salas & Jesús Saurina, 2002. "Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 22(3), pages 203-224, December.
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    More about this item

    Keywords

    bank size; nonperforming loans;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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