A Remedy Framework in the Resolution of Non-performing Loans
Multinational Finance Journal, 2021, vol. 25, no.3/4, pp. 219-245
Demetra Demetriou, Neapolis University Pafos, Cyprus
Abstract:
The aim of the paper is to stimulate the discussion around the recent increase in NPLs across several industrial countries by proposing a remedy framework for the resolution of non-performing loans (NPLs). The framework focuses on providing a reprieve to borrowers until they can recover financially and regain the ability to service their loans. In this respect, this paper proposes the establishment of a state-owned asset management company and attempts to find a balance between incentivizing the participation of banks regarding the disposal of NPLs and limiting risks to the state while avoiding moral hazard situations.
Keywords:
Non-performing loans (NPLs); remedy framework; asset management company; lending behavior; moral hazards
Citation (APA):
Demetriou, D. (2021). A remedy framework in the resolution of non-performing loans. Multinational Finance Journal, 25(3/4), 219–245.
Citation (Harvard):
Demetriou, D., 2021. A Remedy Framework in the Resolution of Non-performing Loans. Multinational Finance Journal, 25(3/4), pp.219–245.