Authors: Vasiliki Makri, Athanasios Tsaganos and Athanasios Bellas
The purpose of this study is to identify, using an econometric model, the factors affecting the Non-Performing Loans Rate (NPL) of the banking systems of the Eurozone for the period 2000-2008. Today, the Eurozone is in the middle of an unprecedented financial crisis, calling into question the soundness of the banking systems of European countries. Looking at both macro-variables (e.g. GDP, debt as % of GDP, unemployment) and micro-variables (Loans, ROA, ROE), we investigate whether and which of these significantly affect the non-performing loans rate.
Keywords: Non-performing Loans, bank specific variables, macroeconomic variables, fixed effect econometric model.