Nonperforming loans and public asset management companies in Malaysia and Thailand
This paper explores the factors which eliminated the nonperforming loan (NPL) problem in Malaysia and Thailand following the 1997 Asian Financial Crisis. The number of NPLs which expanded in the aftermath of the crisis, has since declined in most Southeast Asian countries. Although previous studies have explored the causes of the increase in NPL numbers, few have analysed the factors that contributed to the reduction in their number in Asia. In Malaysia and Thailand, authorities put in place a number of measures to manage NPLs. As a vehicle to acquire NPLs from banks, Malaysia established the Pengurusan Danaharta Nasional Berhad (Danaharta) in 1998, while Thailand established the Thai Asset Management Corporation (TAMC) in 2001. We analyse whether the characteristic features of banks, improvements in macroeconomic conditions, and facilities for purchasing loans caused a reduction in the number of NPLs in Malaysia and Thailand. The results suggest that selling loans to a public asset management company was effective in reducing the number of NPLs in Thailand. However, while macroeconomic conditions influenced the decline in NPL ratios in Thailand, in Malaysia, good performing commercial banks and large commercial and investment banks generally had smaller NPL ratios throughout and following the crisis.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Canberra ACT 2601|
Phone: (61-2) 6249 3780
Fax: (61-2) 6249 3941
Web page: https://crawford.anu.edu.au/research_units/ajrc/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ogawa, K. & Kitasaka, S.-I., 2000. "Bank Lending in Japan: its Determinants and Macroeconomic Implications," ISER Discussion Paper 0505, Institute of Social and Economic Research, Osaka University.
- Boudriga, Abdelkader & Boulila, Neila & Jellouli, Sana, 2009. "Does bank supervision impact nonperforming loans : cross-country determinants using agregate data ?," MPRA Paper 18068, University Library of Munich, Germany.
- John P. Bonin & Yiping Huang, 2001.
"Dealing with the Bad Loans of the Chinese Banks,"
William Davidson Institute Working Papers Series
357, William Davidson Institute at the University of Michigan.
- Allen N. Berger & Robert DeYoung, 1995.
"Problem Loans and Cost Efficiency in Commercial Banks,"
Center for Financial Institutions Working Papers
96-01, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Berger, Allen N. & DeYoung, Robert, 1997. "Problem loans and cost efficiency in commercial banks," Journal of Banking & Finance, Elsevier, vol. 21(6), pages 849-870, June.
- Allen N. Berger & Robert DeYoung, 1997. "Problem loans and cost efficiency in commercial banks," Finance and Economics Discussion Series 1997-8, Board of Governors of the Federal Reserve System (U.S.).
- Akiko Terada-Hagiwara & Gloria Pasadilla, 2004. "Experience of Asian Asset Management Companies (AMCs): Do they Increase Moral Hazard? - Evidence from Thailand," Finance 0410001, EconWPA.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:csg:ajrcau:398. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Akira Kinefuchi)
If references are entirely missing, you can add them using this form.