Abstract
After the outbreak of the financial crisis, the problem of non-performing loans in the banking sector represented by European countries continued to attract attention. As the impact of the crisis weakened, the non-performing loan ratio declined, but it still faced severe challenges. The problem of non-performing loan ratio has improved in the context of the deepening of financial sector reform in China’s banking industry. However, in recent years, data show that non-performing loan ratios of commercial banks have increased. This paper focuses on the non-performing loans of commercial banks in Europe and China. By analyzing the influencing factors of non-performing loans of commercial banks, this paper analyzes the management problems of Chinese and foreign commercial banks and proposes policy recommendations.
Highlights
The problem of non-performing loans in the banking industry has long constrained the development of the European economy after the financial crisis
According to data from the China Banking Regulatory Commission, from 2006 to 2011, the balance of non-performing loans of Chinese commercial banks fell from 125.42 billion yuan to 427.9 billion yuan, and the non-performing loan ratio fell from 7.09% to 1.00%
For the hard-hit countries with deep debt crisis, Italy, Spain, Portugal, and Greece, the average non-performing loan ratio of the banking industry increased by 85.4%, 693.7%, 490.7%, and 236.2%, respectively
Summary
The problem of non-performing loans in the banking industry has long constrained the development of the European economy after the financial crisis. By the end of 2014, compared with the high peak after the crisis, only a few countries had a decline in the non-performing loan ratio, and the rate of non-performing loans in most depressed economies rose rapidly. The non-performing loan ratio of China’s commercial banks has been declining and “double-down” year after year. As China’s economic growth slows down and the business situation continues to deteriorate, the banking industry that serves and is attached to the real economy has experienced the acceleration of non-performing assets. Based on the above background, this paper compares the non-performing loans of banks in Europe and China, analyzes the influencing factors of non-performing loan ratios of commercial banks in Europe and China, and proposes policy recommendations for the development of China’s banking industry
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