Bericht
Lending Growth, Non-Performing Loans and Loan Losses
At macro level, large loan losses for banks have often been preceded by periods of high lending growth. We analyse at bank level whether high loan growth also leads to more problem loans later on. The analysis is carried out on a panel of Norwegian banks covering the period 1996 - 2016. The applied methodology is similar to the one found in similar studies on Spanish banks as well as on banks in several OECD countries. We find a statistically significant positive relationship between past excessive loan growth at a bank and its amount of problem loans 2 - 3 years ahead. Unlike in the studies of other countries, the effect is not economically significant. Results do not indicate that excessive loan growth will never have any adverse effect at Norwegian banks, as our sample covers a relatively calm period in the Norwegian banking sector. Nevertheless, with a non-linear technique, we do find some indication that banks with much higher lending growth also experience proportionally much higher loan losses.
- ISBN
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978-82-8379-054-2
- Language
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Englisch
- Bibliographic citation
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Series: Staff Memo ; No. 8/2018
- Classification
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Wirtschaft
- Subject
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lending growth
loan losses
dynamic panel model
spline model
- Event
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Geistige Schöpfung
- (who)
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Kvisgaard, Vera
Vale, Bent
- Event
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Veröffentlichung
- (who)
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Norges Bank
- (where)
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Oslo
- (when)
-
2018
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Bericht
Associated
- Kvisgaard, Vera
- Vale, Bent
- Norges Bank
Time of origin
- 2018
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Estimates of banks' losses on loans to the corporate sector
Inferring Interbank Loans and Interest Rates from Interbank Payments - an Evaluation
Monetary and Macroprudential Policy with Multi-Period Loans
The role of non-performing loans for bank lending rates
The Relation Between Banks' Funding Costs, Retail Rates and Loan Volumes: An Analysis of Norwegian Bank Micro Data
Lending relationships in loan renegotiation: Evidence from corporate loans
Identification of Interbank Loans and Interest Rates from Interbank Payments - a Reliability Assessment
Effects of Higher Equity Ratio on a Bank's Total Funding Costs and Lending
Collateral and Repeated Lending
Non-performing loans and the lending channel of shock transmission across countries
Aggregate Bankruptcy Probabilities and Their Role in Explaining Banks' Loan Losses
The Declining Deposit to Loan Ratio - What Can the Banks Do?
Estimates of banks' losses on loans to the corporate sector
Inferring Interbank Loans and Interest Rates from Interbank Payments - an Evaluation
Monetary and Macroprudential Policy with Multi-Period Loans
The role of non-performing loans for bank lending rates
The Relation Between Banks' Funding Costs, Retail Rates and Loan Volumes: An Analysis of Norwegian Bank Micro Data
Lending relationships in loan renegotiation: Evidence from corporate loans
Identification of Interbank Loans and Interest Rates from Interbank Payments - a Reliability Assessment
Effects of Higher Equity Ratio on a Bank's Total Funding Costs and Lending
Collateral and Repeated Lending
Non-performing loans and the lending channel of shock transmission across countries
Aggregate Bankruptcy Probabilities and Their Role in Explaining Banks' Loan Losses
The Declining Deposit to Loan Ratio - What Can the Banks Do?
Estimates of banks' losses on loans to the corporate sector
Inferring Interbank Loans and Interest Rates from Interbank Payments - an Evaluation
Monetary and Macroprudential Policy with Multi-Period Loans
The role of non-performing loans for bank lending rates
The Relation Between Banks' Funding Costs, Retail Rates and Loan Volumes: An Analysis of Norwegian Bank Micro Data
Lending relationships in loan renegotiation: Evidence from corporate loans
Identification of Interbank Loans and Interest Rates from Interbank Payments - a Reliability Assessment
Effects of Higher Equity Ratio on a Bank's Total Funding Costs and Lending
Collateral and Repeated Lending