[Home ] [Archive]   [ فارسی ]  
Main Menu
Journal Information
Aims& Scopes
Editorial Board
About the Journal
Journal News
Articles archive
All Issues
Current Issue
For Authors
Call for Papers
Submission Instruction
Submission Form
For Reviewers
Reviewers Section
Registration Information
Registration Form
Contact us
Contact Information
Contact us
Site Facilities
Site map
Search contents
Top 10 contents
Inform to friends
MBRI Journals

Journal of Money & Economy


(رتبه علمی-پژوهشی)

Related Journals

Journal of Islamic Finance Research



Search in website

Advanced Search
Receive site information
Enter your Email in the following box to receive the site news and information.
:: year 2, Issue 3 (spring 2010) ::
JMBR 2010, 2(3): 115-156 Back to browse issues page
Analyzing the Effects of Balance Sheet Approach (Firms-Banks) on Banks' Non-performing Loans
Seyyed Mahmood Alavi * , Soode Saberian Ranjbar
Abstract:   (5070 Views)
According to review of recent developments in both fields of macroeconomic and banking in Iran، and their assuring effects on economy's recession cycle and rising banks' non-performing loans (NPLs)، the ground for the formation of hypothesis tried to examine in this paper is set: "Banks' NPLs are fostered by real sector developments through deterioration of the balance sheets of companies and non-financial firms following financial and real assets price bubble burst".
In order to test the hypothesis، the theoretical literature relating to balance sheet approach (firms' and banks' balance sheets) has been reviewed. Our findings indicate that decline in the aggregate demand for loans and the formation of a recession cycle in recent years، especially after 1387، have raised firms' default risk. The phenomena happened following the assets market drop off، especially the real estate market fall in the banks' lending real rate and the inappropriate price setting of domestic and foreign services in favor of more imports. These have caused banks to directly suffer from credit risk and NPLs.
The most important politic recommendation is financial capital injection to banks without the fiscal stimulus of government and encouragement of aggregate demand by utilization of proper fiscal policy. During recession، since expansionary monetary policies have less affects on demand encouragement، emphasis on discretionary monetary expansion only causes financial and economic instability، resulting in inflation in further economic cycles. Reconstruction of firms' and banks' financial structure could be a major medium-term mean requiring the restructuring of economy's financial structure.
Keywords: Asset Price Bubble, Aggregate Demand (AD), Economic Cycles, Balance Sheet Approach, Default Risk, Non, performing Loans, Fiscal Stimulus
Full-Text [PDF 757 kb]   (2377 Downloads)    
Type of Study: Empirical Study |
Received: 2014/07/26 | Accepted: 2014/07/26 | Published: 2014/07/26

XML   Persian Abstract   Print

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
year 2, Issue 3 (spring 2010) Back to browse issues page
فصلنامه پژوهش‌های پولی-بانکی Journal of Monetary & Banking Research
Persian site map - English site map - Created in 0.05 seconds with 37 queries by YEKTAWEB 4636