Incapability or bad luck? Testing the 'bad management' hypothesis in the Italian banking system

CRESPI, FABRIZIO;ALIANO, MAURO
2017-01-01

Abstract

Using specific evidences from the Italian banking sector and following a microeconomic approach, in this chapter we test the “bad management” hypothesis first introduced by Berger and Deyoung (1997), which suggests that poor managerial practice causes an increase in problem loans after a lag. The chapter gives a contribution to the existing literature in this field, in that it investigates non performing loans (NPLs) and other soured loans jointly. Our results confirm the “bad management” hypothesis, in that we discover a positive (lagged) relation between the value of past due/overdrawn loans and NPLs which, in a management perspective, indicates the incapability of the credit manager to anticipate or to recover (at least partially) problematic credits.
2017
Inglese
The business of banking. Models, risk and regulation
Paola Cruz-Garcia, et al.
Giusy Chesini, Elisa Giaretta, Andrea Paltrinieri
55
78
24
Palgrave Macmillan Studies in Banking and Financial Institutions
London
REGNO UNITO DI GRAN BRETAGNA
9783319548937
Esperti anonimi
internazionale
scientifica
Non-performing loans; bad loans; banks; management; Bank specific determinants; Dynamic panel data
no
info:eu-repo/semantics/bookPart
2.1 Contributo in volume (Capitolo o Saggio)
Crespi, Fabrizio; Aliano, Mauro
2 Contributo in Volume::2.1 Contributo in volume (Capitolo o Saggio)
2
268
reserved
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