Management and Resolution Methods of Non-performing Loans: A Review of the Literature

28 Pages Posted: 18 Aug 2016 Last revised: 13 Mar 2017

See all articles by Dimitrios Anastasiou

Dimitrios Anastasiou

Athens University of Economics and Business, School of Business, Department of Accounting and Finance; Athens University of Economics and Business - Department of Economics

Date Written: August 18, 2016

Abstract

In the financial crisis of 2007, many banks with high level of NPLs found their sources of capital dried up, which occurred because of bad management. Huge amounts of NPLs imply both a lack of management methods and lack of capital. Also, high NPL levels have resulted to negative effects to banks’ lending activity, making bank officers-managers more concern for the future of the whole banking system. The purpose of this study is twofold. First, to present some NPL management methods that already exist in the literature and second, to make a clear distinction between the ex-post and ex-ante management of NPLs. I tried to collect in one paper what other researchers suggested for the proper management and fight against NPLs for different kinds of banking systems around the world. Hopefully, by examining these methods, banks will be able to cope with the problem of NPLs.

Keywords: Non-performing loans, NPL management, bank restructuring, financial stability, macroprudential policy, poor credit risk management

JEL Classification: G21, G28, G38

Suggested Citation

Anastasiou, Dimitrios, Management and Resolution Methods of Non-performing Loans: A Review of the Literature (August 18, 2016). Available at SSRN: https://ssrn.com/abstract=2825819 or http://dx.doi.org/10.2139/ssrn.2825819

Dimitrios Anastasiou (Contact Author)

Athens University of Economics and Business, School of Business, Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

Athens University of Economics and Business - Department of Economics ( email )

76 Patission Street
GR-10434 Athens
Greece

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