Economic policy uncertainty, bank nonperforming loans and loan loss provisions: are they correlated?

Purpose This paper examines the correlation of economic policy uncertainty (EPU) with nonperforming loans and loan loss provisions for 22 major developed countries over 2008–2017 period. Design/methodology/approach The study used Pearson methodology to assess between EPU, bank provisions. Findings findings reveal that EPU is negatively correlated in banking sector EU but not non-EU countries. Also, most advanced economies – G7 countries, while are more responsive changes than NPLs Practical implications implication influenced by regional characteristics. Originality/value first analyze association under classifications such as EU, provides insights on how differences might explain co-movement