Abstract
The study aimed to investigate the link between uncertainty in banking and non – performing loans in bank lending behaviour. The study uses a panel data from 31 Vietnamese commercial banks over the 2007-2019 period for empirical analysis and the dispersion of shocks to bank-level variables to measure banking uncertainty. To strongly confirm our findings, the authors perform a battery of alternative checks based on different econometric techniques, including fixed effect regressions with Driscoll– Kraay standard errors, the two-step system generalized method of moments estimator. Uncertainty induces multifaceted unfavorable impacts on bank lending. Concretely, banks tend to restraint loan growth, suffer more credit risk, the possibility of increasing bad debt and charge higher lending rates during periods of higher uncertainty. Further investigation explore the impacts of uncertainty on quantity, quality and prices of bank lending.
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