EuroEconomica, Vol 37, No 1 (2018)

Determinants of Credit Risk in the European Banking Sector

Daniela Bozga, Ioan Trenca


The purpose of this article is to determine the factors that influence the credit risk and the quality of the loan portfolio. Among them are the capital adequacy, GDP, unemployment rate, inflation rate, government debt and financial crisis. For this purpose we developed a panel consisting of 70 commercial banks from 13 European high income countries (Austria, Belgium, Cyprus, Germany, Greece, Italy, Norway, Poland, Portugal, Spain, Sweden, Denmark and Switzerland). The period analyzed in this study is Q12005: Q42011. The quality of the loan portfolio is determined as a ratio between: Loan reserves (allowance for loan losses) and Total loans.



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