Modelling Recovery Rates for Non-performing Loans

Resolution of Non-Performing Loans in China

Dealing with non-performing loans of banks.PDF

A lot of confusion and misunderstanding has been created by several commentators on the issue of non-performing loans (NPLs) of banking system. They take the absolute amount of such loans at the current point of time and compare it with the quantum of such loans in October 1999 and make a hue and cry that the situation has deteriorated because the quantum of NPLs has gone up. Such a simplistic ...

The Impact of Provisioning Policies on Non-Performing Loans

The Central Bank has specific regulations, including asset classification guidelines and how to perform loan’s loss provisioning to oversee banks and credit institutions. The Central Bank seeks to improve the quality of the loan and reduce the amount of non-performing loans by reducing the revenues of the bank or credit institution through imposing fine on balance of each of the categories of n...

Recovery Rates of Bank Loans: Empirical Evidence for Germany

Only few studies exist concerning the recovery rate of bank loans. The recovery rate is defined as the payback quota of a defaulted borrower. Prediction models of recovery rates are gaining in importance because of the Basel II-reform and the impact for the credit risk management, the calculation of interest rates and the results of credit risk models. Factors that influence the recovery rate c...

Non-Performing Loans, Prospective Bailouts, and Japan’s Slowdown

In this paper we argue that the delay in the government bailout of the financial sector played a key role in Japan’s slowdown during the 1990s and early 2000s. We construct a dynamic general equilibrium model in which the government provides deposit insurance to the financial sector. The model has the following property: the existence of non-performing loans, combined with a delay in the govern...