Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272992 
Year of Publication: 
2022
Series/Report no.: 
wiiw Working Paper No. 214
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
Bank stability is an important aspect of financial stability, especially in bank-centric systems such as those in Southeast Europe. The financial crisis has shown that there is a particular need to monitor credit and other similar risks. Hence, it is important to analyse risks affecting the stability of both the banking sector and the financial system as a whole. To that end, central banks have developed macroprudential policies aiming to safeguard financial stability. However, little is known about the drivers of some financial risks. In that context, this study analyses the determinants of credit risk, which is the most prominent risk in the banking sectors of three selected Southeast European economies - Montenegro, Kosovo* and Bosnia and Herzegovina. Dynamic panel data techniques were applied to 48 banks, which represent almost the entire banking sectors in the respective countries. The empirical evidence has shown that both macroeconomic and bank-specific determinants represent influential factors driving credit risk in Southeast Europe. Particularly important macroeconomic factors affecting credit risk are business cycle and sovereign debt. On the other hand, bank size, capital levels, credit activity and profitability are the most prominent factors influencing credit risk in the region.
Subjects: 
Credit Risk
Financial Stability
Southeast Europe
Banking
JEL: 
G21
E37
Document Type: 
Working Paper

Files in This Item:
File
Size
737.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.