The Impact of Bank-Specific and Macroeconomic Factors on Non-performing Loans in Sri Lankan Commercial Banks

The main purpose of this study is to ascertain the effect of bank-specific and macroeconomic factors on non-performing loans in systemically and non-systemically important commercial banks in Sri Lanka over 10 year’s period from 2004 to 2013.Also,the study examines the impact of civil war that prevailed in the country for 30 years on the ex-post credit risk of the banking sector.The study employed panel data methodology to investigate the effect of bank-specific and macroeconomic factors on non-performing loans.Panel unit root test has been undertaken in order to test the stationary of the variables.Hausman test and Wald coefficient restriction test were used to select the appropriate model out of pooled,random,and fixed effect.A dummy variable panel regression model adopted to study the war effect,considering 2009 as the structural year.Findings revealed that return on assets as a proxy for bank efficiency has a significant negative influence,while non-interest income as a proxy for income diversity is positively correlated with non-performing loans of systemically important banks.Both real gross domestic products and lending rates were highly significant in both bank types.On contrary with literature,growth in bank branches is negatively correlated.Public banks do not account for higher level of non-performing loans compared to their private counterpart.Finally,it was identified that civil war had an effect on the level of non-performing loans in commercial banks.The research would have benefited if the analysis is carried out among classified types of loans offered by commercial banks.Future researchers should involve in identifying the most significant contributing loan type to the non-performing loans and its determinants.This study is one of the few studies which have investigated the causes of non-performing loans in the commercial banking industry in Sri Lanka.The analysis of civil war and its impact on non-performing loans is the first study of that nature to be conducted in the context.

Non-performing loans(NPLs),liquidity creation,and moral hazard:Case of Chinese banks

This study analyzes the impact of non-performing loans(NPLs)on bank liquidity creation to investigate the existence of moral hazard problem in Chinese banks.It uses data from 197 listed and unlisted Chinese banks,spanning the period 2005 to 2014.Total liquidity creation by Chinese banks is declining,and NPLs ratio has started to increase following a continuous decline between 2005 and 2012.Using one-step system GMM estimation,fixed and random effect model,and pool data analysis,we find that liquidity creation by Chinese banks does not depend on NPLs ratio,i.e.,we did not find the evidence of moral hazard problem in Chinese banks.We repeated the analysis for small and large banks and the results of these sub-samples reinforced our findings for the aggregate sample.

Do Macroeconomic Determinants of Non-Performing Loans Vary with the Income Levels of Countries?

This paper explores the macroeconomic determinants of non-performing loans(NPL) in 19 Asian countries(low to high income economies) using the Generalized Method of Moments estimation approach based on the economic data for the period between 1998 and 2015. The categorization of the economies is based on the average gross national income per capita as set by the World Bank.Specifically, the paper aims to evaluate if the determinants of NPL vary with the income levels of the countries. The results indicate that the NPL is strongly influenced by the inflation rate. The effect is,however, negative in the high-income and the middle-income countries and positive in the low-income countries. The GDP per capita has a dynamic negative relationship with the NPL in the high-income and the low-income countries. The remittance has a significant positive association in the high-income and a significant negative association in the low-income countries. Similarly, the unemployment rate has a positive effect on NPL in the middle-income and the low-income countries. With the rise in the official exchange rate, the NPL level increases in the low-income countries. The overall estimation results suggest that the NPL in Asian banking system depend on some key macroeconomic variables,such as unemployment rate, inflation rate, official exchange rate, remittance received and gross domestic product per capita, and these associations vary with the income level of the countries. Therefore,economic level of a country should be carefully considered while formulating credit policy to minimize credit risks in the banking system.

Review of Arbitral Award of Network Loan and Analysis of Construction of Implementation Review Rules

The network arbitration cases arising from the network lending disputes are pouring into the courts in large numbers.It is reported that the network arbitration system of some arbitration institutions even“can accept more than 10,000 cases every day,”while online lending is booming,it has also caused a lot of contradictions and disputes,and traditional dispute resolution methods have failed to effectively respond to the need for efficient and convenient resolution of online lending disputes.This paper tries to study the arbitral award of online loans and proposes the construction of implementation review rules.

A Knowledge-based System for the Analysis of the Ability of Paying back Loans

This paper describes the development of a knowledgebased system (KBS) for determining whether or not, and under what conditions, a bank Ioan officer should grant a business loan to a company. The prototype system developed focuses on what is bank loans risks management, how to prevent risk by the analysis of the ability of paying back loans. The paper makes the structural analysis involved in the system's decision situation, the structured situation diagram or model, dependency diagram and the document needed by the KBS prototype system thus are developed. Through testing the samples from loan business, the quality for the analysis of the ability of paying back loans can be effectively evaluated by the KBS prototype system.

Intelligent Decision Support System for Bank Loans Risk Classification

Intelligent Decision Support System (IISS) for Bank Loans Risk Classification (BLRC), based on the way of integration Artificial Neural Network (ANN) and Expert System (ES), is proposed. According to the feature of BLRC, the key financial and non-financial factors are analyzed. Meanwhile, ES and Model Base (MB) which contain ANN are designed . The general framework,interaction and integration of the system are given. In addition, how the system realizes BLRC is elucidated in detail.

Designing of Commercial Bank Loans Risk Early Warning System Based on BP Neural Networks

According to the index early warning method, a commercial bank loans risk early warning system based on BP neural networks is proposed. The warning signal is mainly involved with the financial situation signal of loaning corporation. Except the structure description of the system structure the demonstration of attemptive designing is also elaborated.

Problems in Development of Micro-credit Loans to Farmers in China and Countermeasures

There are problems of inadequate natural endowment and weak stamina in the development of micro-credit loans to farmers in China. Specifically,existing problems include narrow profit space,serious non-agricultural trend of funds,high dependence on government support,short life cycle,and constantly increasing operating risks. These problems are related to endogenous drawback in design,defect in operating procedure,lagging in relevant policies and measures,and vacancy in risk compensation mechanism.

An Empirical Study of the Allocation Efficiency of Rural Financial Resources in Hubei Province from the Perspective of Agricultural Loans

The incompatibility of China's economy and finance has to some extent inhibited the development of rural economy. Taking Hubei Province for example,we measure the allocation efficiency of rural financial resources from the perspective of agricultural input and output,and use the modern rural financial development theory to set forth some policy recommendations on how to build a new rural financial resource allocation system. Studies have shown that the allocation efficiency of rural financial resources is low in China,and improving the allocation efficiency of rural financial resources is the key to perfecting rural financial environment while increasing financial support for agriculture.

Loans to Foreign-Funded Enterprises

With the implementation of the opening policy, the Bank of China(BOC) started lending to foreignfunded enterprises early in the 1980s. At the end of 1993, 50 percent of foreignfunded enterprise had opened accounts with the BOC. BOC has made US dollar loans worth $16.8 billion, and RMB ioans of ￥ 135.55 billion to

World Bank loans help ease Central China's power Supply Shortage

Central China’s power sup-ply will get a major boostfrom the expansion of Henan Province’sYanshi Thermal Power Plant --a project involving $180 million worth of WorldBank loans. Yanshi Plant is situated on thesouth bank of Yellow River, about 30 kmeast of Luoyang Municipality. Once com-pleted at the end of 1995, the plant willboast an installed capacity of 1000 MW,

Predictive Modeling and Expectable Loss Analysis for Borrower Defaults of Mortgage Loans

Home mortgage loan lending firms are exposed to many business risks.This paper focuses on the mortgage loan borrower risks and proposes a prospective loss analysis approach in regard to loan repayment defaults of borrowers.For this purpose,a predictive modeling is presented in three stages.In the first stage,occurrence of borrower defaults in a mortgage loans portfolio is modeled through the generalized linear models(GLMs)type regressions for which we specify a logistic distribution for default events.The second stage of modeling develops a survival analysis in order to estimate survival probability and hazard rate functions for individual loans.Ultimately,an expectable loss amount model is presented in the third stage as a function of conditional survival probabilities and corresponding hazard rates at loan levels.Throughout all modeling stages,a large and real data set is used as an empirical analysis case by which detailed interpretations and practical implications of the obtained results are stated.

Analyzing China's Non-performing Financial Assets

The non-performing assets of China’s financial institutions totaled RMB l,800 billion. Has this threatened the safety of China’s financial industry? Where do this large amount of nonperforming assets come from?

Guidelines Procurement under IBRD Loans and IDA Credits

I. INTRODUCTIONPurpose1.1 The purpose of these Guidelines is to informthose carrying out a project that is financed in wholeor in part by a loan from the International Bank forReconstruction and Development (IBRD) or a creditfrom the International Development Association(IDA), of the arrangements to be made for procur-ing the goods and works (including relatedservices) required for the project. The Loan Agree-ment governs the legal relationships between the Bor-rower and the Bank, and the Guidelines are made ap-plicable to procurement of goods and works for theproject, as provided in the agreement. The rightsand obligations of the Borrower and the providers ofgoods and works for the project are governed by thebidding documents, and by the contracts signed bythe Borrower with the providers of goods and works,and not by these Guidelines or the Loan Agreements.No party other than the parties to the Loan Agree-ment shall derive any rights therefrom or have anyclaim to loan proceeds.

中国绿色信贷发展状况、基本特征与政策建议

绿色信贷市场是中国绿色金融体系中发展最早、规模最大的市场,在支持绿色领域融资、推动“双碳”目标实现的过程中将发挥举足轻重的作用。目前全球尚无绿色信贷的统一标准,国内外标准各有侧重。近年来中国的绿色信贷市场快速发展,其规模、增速及占总贷款的比重均持续攀升。从结构特征看,其资金主要投向绿色交通运输和清洁能源领域,参与机构从大型银行拓展到中小银行。从变化趋势看,其政策目标从号召引导过渡到制度规范,政策重点措施从限制性转变为鼓励性,产品类别从单一化发展到多样化,绿色信贷市场逐渐走向规范和完善。但是,当前中国绿色信贷市场在制度环境、激励约束、信息披露监管等方面仍存在一些缺陷。基于上述分析,提出促进中国绿色信贷市场发展的四点建议:促进绿色信贷制度的完善,加大政策激励与支持的力度,加快数据与信息披露体系建设,加强全流程的跟踪监管。

中小企业融资难背景下的商业银行信用风险缓释行为研究:信用风险转移or贷款出售?

在面临高风险的中小企业贷款时,商业银行如何签订信用衍生产品合约来缓解自身信用风险,进而在支持中小企业和民营企业融资时实现自身的最大效用,成为商业银行支持中小企业融资需要重点考虑的问题。本文将信用风险转移工具与贷款出售相结合,比较了存在道德风险与不存在道德风险情况下商业银行的效用差异。理论模型分析表明,当不存在道德风险时,贷款出售市场会保证商业银行实现贷款的期望收益;但监管成本的存在使得信用风险转移工具的使用效用低于贷款的预期收益,且合约支付没有呈现出状态分离特征,商业银行会倾向于使用贷款出售来转移信用风险。在存在道德风险时,贷款出售市场并没有完全对冲商业银行的信用风险;而对于信用风险转移工具而言,当信用风险缓释工具卖方资产管理能力非常强,且大于监管惩罚的期望值时,商业银行能够获得高于贷款预期收益的效用,信用风险转移工具是更优的选择。