Non-performing loans - new risks and policies? : NPL resolution after COVID-19: main differences to previous crises

  • This paper discusses policy implications of a potential surge in NPLs due to COVID-19. The study provides an empirical assessment of potential scenarios and draws lessons from previous crises for effective NPL treatment. The paper highlights the importance of early and realistic assessment of loan losses to avoid adverse incentives for banks. Secondary loan markets would help in this process and further facilitate bank resolution as laid down in the BRRD, which should be uphold even in extreme scenarios.

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Author:Johannes Kasinger, Jan Pieter KrahnenORCiDGND, Steven OngenaORCiDGND, Loriana PelizzonORCiDGND, Maik SchmelingORCiDGND, Mark WahrenburgORCiDGND
Parent Title (English):SAFE white paper ; No. 84
Series (Serial Number):SAFE white paper series (84)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Year of Completion:2021
Year of first Publication:2021
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2021/07/30
Tag:BRRD; Bank Resolution; Covid-19; Non-performing Loans; Secondary Loan Markets
Page Number:42
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht