The purpose of this paper is to relate the Danish concept of the “Balance Principle” to test the hypotheses of systemic liquidity risk in the banking sector. In the paper, the major econometric method is to gauge the general applicability of theories of liquidity and to test the applicable validity of Bosnia and Herzegovina (BH). A prime example for this study is taken from the first quarter of...

The real macroeconomic instability and frequent changes in the monetary and banking regulations with financial contagion to the banks’ financial statements in the banking network of Iran cause intensified instabilities in its financial behaviors. In this paper, using statistical analysis and three-dimensional charts, we have analyzed the behavior of the financial statements of consolidated bala...

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. A...

This paper proposes a simple model that possibly explains the productivity slowdown observed in Japan during the 1990s. Under a forbearance policy by the government toward nonperforming loans, one keeping insolvent firms afloat, other economic agents become exposed to a higher risk of not being paid by their customers (payment uncertainty). It is shown that the payment uncertainty, working thro...

We investigate the effects of bank distress on the productivity of borrowing firms by using data on listed companies in the Japanese manufacturing industry during the 1990s. We find some evidence suggesting that deterioration in the financial health of banks, such as a decline in the capital-asset ratio, decreased the productivity of their borrowers during the period of the severe financial cri...