Disentangling the transmission channel NPLs-cost of capital-lending supply

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2020-07-15
Date
2018
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Abstract
This paper analyses the effects of non-performing loans (NPLs) on the cost of capital, and on lending and liquidity supply, for a sample of 225 Eurozone banks over the period 2002Q1-2016Q4. Our results demonstrate that NPLs increase the cost of capital, which reduces both lending supply and liquidity creation. This phenomenon is comparatively more significant for periphery county banks than for c ... [++]
This paper analyses the effects of non-performing loans (NPLs) on the cost of capital, and on lending and liquidity supply, for a sample of 225 Eurozone banks over the period 2002Q1-2016Q4. Our results demonstrate that NPLs increase the cost of capital, which reduces both lending supply and liquidity creation. This phenomenon is comparatively more significant for periphery county banks than for core country banks. [--]
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Routledge
Published in
Applied Economics Letters 2019, vol. 26, no. 16, 1333-1338
Departament
Universidad Pública de Navarra. Departamento de Gestión de Empresas / Nafarroako Unibertsitate Publikoa. Enpresen Kudeaketa Saila
 
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https://hdl.handle.net/2454/35272
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