Abstract

The current study aims to investigate the macroeconomic determinants of nonperforming loans (NPLs) in the GCC economies during the period spanning 2000 to 2018. A generalized method of moments is used to identify the factors that play imperative role in determining NPLs. The findings reveal that deterioration of macroeconomic factors and economic shock increase banks credit risk. Thus, the policymakers and authorities must strive to maintain a healthy economy and apply macroprudential regulations to enhance the banks financial stability and minimize credit risk.

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