Choudhary, M. Ali and Jain, Anil K. (2021) Corporate stress and bank nonperforming loans: evidence from Pakistan. Journal of Banking and Finance, 133. ISSN 0378-4266
Full text not available from this repository.Abstract
Using detailed administrative Pakistani credit registry data, we show that banks with low leverage ratios are both significantly slower and less likely to recognize a loan as nonperforming than other banks that lend to the same firm. Moreover, we find suggestive evidence that this lack of recognition impedes loan curing, with banks with low leverage ratios reporting significantly higher final default rates than other banks for the same borrower (even after controlling for differences in loan terms). Our empirical findings are consistent with the theoretical prediction that classifying a nonperforming loan is more expensive for banks with less capital.
| Item Type: | Article |
|---|---|
| Official URL: | https://www.sciencedirect.com/science/journal/0378... |
| Additional Information: | © 2021 Elsevier B.V. |
| Divisions: | Centre for Economic Performance |
| Subjects: | H Social Sciences > HG Finance |
| Date Deposited: | 09 May 2024 11:00 |
| Last Modified: | 16 May 2024 03:30 |
| URI: | http://eprints.lse.ac.uk/id/eprint/122995 |
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