Ekonomski utjecaj neprihodujućih kredita u zemljama Srednje i Istočne Europe

Rad istražuje utjecaj povećanja razine neprihodujućih kredita na kretanje bruto domaćeg proizvoda, nezaposlenost i udjela kredita u bruto domaćem proizvodu za 11 zemalja Srednje i Istočne Europe između 2008. i 2019. Ekonomski utjecaj neprihodujućih kredita razmatran je korištenjem panel vektorsko autoregresijskog modela te funkcije impulsnog odziva. Rezultati rada dokazuju snažan i dugotrajan negativan utjecaj povećanja neprihodujućih kredita na bruto domaći proizvod i nezaposlenost. Navedeni rezultati su važni s obzirom na značaj bankovnih kredita u zemljama Srednje i Istočne Europe te mogući negativan utjecaj COVID-19 krize na kvalitetu bankovne aktive

IMPACT OF NON-PERFORMING LOANS ON BANKS\u27 LOAN PORTFOLIO AND ECONOMIC GROWTH IN THE REPUBLIC OF CROATIA AND BOSNIA AND HERZEGOVINA

Bank loans are the most important source of the banks’ income and profitability. The structure of loan portfolio, such as maturity, currency, type of interest rate or credited sector, is also highly significant for banks’ business performance. In the latest global financial crisis, quality of the loans sharply deteriorated, thus increasing the percentage of non-performing loans in banks’ balance sheets and causing major problems in business activity for many banks. The events emphasized the importance and potential impact of non-performing loans not just on banks, but on the whole economy and society. The aim of this article is to analyse determinants of non-performing loans, future challenges and possible solutions of high NPL ratios in Bosnia and Herzegovina and Croatia. Multiple regression analysis was conducted to determine strength and coefficient of the independent micro and macro variables (GDP growth rate, unemployment rate, Consumer Price Index, amount of bank loans and value of stock exchange indexes) on the level of non-performing loans. Obtained results indicate that GDP growth rates are significant in both countries but with opposite impact. Additionally, unemployment rate is significant in Bosnia and Herzegovina and amount of loans in Croatia. Despite current economic expansion, banks are still slightly reluctant in approving loans, alert of the potential growth of the non-performing loans and its effect on banking performance. In recent years, the level of NPL ratio started decreasing in both countries, mostly due to the selling or writing off loans by the commercial banks, but this level is still higher than in the comparable countries. Therefore, more effort is needed to further improve loan portfolio and enforce economic growth, with possible measures being better banks’ NPL management, improvement of insolvency procedures and more transparent justice system

DETERMINANTS OF BUSINESS SUSTAINABILITY OF SMALL AND MEDIUM SIZED ENTERPRISES IN THE REPUBLIC OF CROATIA

Mala i srednja poduzeća čine najveći dio poslovnih subjekata te zapošljavaju značajan dio radne snage određene ekonomije. Cilj ovog rada je utvrditi pokazatelje uspješnosti poslovanja malih i srednjih poduzeća različitih gospodarskih sektora u Republici Hrvatskoj te ukazati koja su to mala i srednja poduzeća najizloženija mogućim negativnim posljedicama krize povezane s COVID-19 virusom. Za potrebe analize i usporedbe poslovnih subjekata korištena je vertikalna i horizontalna analiza financijskih izvještaja te analiza poslovnih pokazatelja. Rezultati rada ukazuju kako mikro poduzeća u Hrvatskoj imaju najniži udio vlastitih izvora financiranja te najviši udio kratkoročnih obveza, a navedeno se reflektira kroz lošije pokazatelje likvidnosti i zaduženosti. Gospodarske mjere i potpore donesene tijekom COVID-19 pandemije osigurale su određenu stabilnost poslovnih subjekata te prevladavanje poslovnih izazova. Mikro poduzeća trebala bi u svojem poslovanju više voditi računa o strukturi izvora financiranja te, radi povećanja stabilnosti, koristiti dugoročnije izvore financiranja.Small and medium sized enterprises account for the majority of businesses worldwide and are important contributors of workforce employment. Aim of this paper is to analyse business indicators of small and medium sized enterprises in different economic sectors in Republic of Croatia and determine which small and medium enterprises are mostly exposed to the possible negative consequences of COVID-19 pandemic crisis. For the analysis purposes, paper uses vertical and horizontal analysis of financial statements and analysis of business indicators. Paper results indicate that micro enterprises in Republic of Croatia have a lowest proportion of private financing and highest proportion of short-term obligations and this is reflected in inferior liquidity and debt indicators. Economic measures and subsidies during COVID-19 pandemic ensured certain stability of enterprises and overcome of business challenges. Micro enterprises should take more into account their financing sources and, to increase stability, use long-trm financing

The national question and our missions

Title: Nacionalno pitanje i naši zadaci (The national question and our missions) Originally published: Borba, organ Nezavisna radničke partije Jugoslavije; a series of four articles published in August and September 1923. The excerpt is the third article, published on 30 August 1923 under the sub-title Osnovni naš nacionalni stav: federalizam Language: CroatianThe excerpt used is from August Cesarec, Izbor članaka, ed, by Nusret Se-ferović (Beograd: Kultura, 1962), pp. 30–35. About the author..

Determinants of non-performing exposures and economic impact on the financial stability in the European union

Europska unija je, nakon financijske krize 2008./2009., bila izložena snažnom povećanju razine neprihodujućih kreditnih izloženosti banaka. S obzirom na značaj banaka u financijskom sustavu i kredita kao izvora financiranja ekonomske aktivnosti, pogoršanje kvalitete bankovne aktive doprinijelo je sporijem oporavku gospodarstva. Određene zemlje, koje su bile izložene snažnom rastu razine neprihodujućih kredita, relativno su brzo povećale kvalitetu bankovne aktive, dok su pojedine zemlje dugoročno ostale izložene vrlo visokim razinama neprihodujućih kredita. Doktorski rad istražuje odrednice nastanka neprihodujućih kreditnih izloženosti i ekonomske učinke povećanja neprihodujućih kreditnih izloženosti na financijsku stabilnost u Europskoj uniji. Za testiranje hipoteza koriste se generalizirana metoda momenata i panel vektorsko autoregresijski model. Rezultati istraživanja dokazuju kako na razinu neprihodujućih kreditnih izloženosti utječu makroekonomske i bankovno specifične odrednice. Analiza ekonomskih učinaka neprihodujućih kreditnih izloženosti pokazala je kako je porast neprihodujućih kreditnih izloženosti imao snažniji negativni utjecaj na financijsku stabilnost u zemljama s višim razinama neprihodujućih kreditnih izloženosti. Implikacije istraživanja mogu se koristiti od strane bankovnih regulatora i uprava. Stopu inflacije potrebno je uzeti u obzir prilikom predviđanja razine neprihodujućih kreditnih izloženosti, a povećanje odnosa operativnih troškova i prihoda doprinosi smanjenju neprihodujućih kredita. Banke bi stoga u kriznim vremenima trebale biti oprezne prilikom razmatranja smanjenja kvalitete metodologija i/ili zaposlenika u procedurama odobravanja kredita. S obzirom na snažniji utjecaj neprihodujućih kreditnih izloženosti na financijsku stabilnost u zemljama s višom razinom takvih izloženosti, a koje u pravilu nisu uvele protuciklički zaštitni sloj kapitala, potrebno je razmotriti drugačiji način izračuna navedenog sloja kapitala i/ili uvođenje posebnih kreditnih protucikličkih rezervacija. U slučaju naglog pogoršanja kvalitete kreditne aktive banaka, regulatori bi trebali donijeti brze i odlučne mjere, usmjerene primarno na izdvajanje kredita iz bilance banaka i promjene stečajnih zakona.Bank loans are the most important component of bank’ assets and income. Therefore, deterioration of bank’ loan quality, measured by the increase of non-performing exposures, impacts banks performance. Level of non-performing loans can be impacted by a macroeconomic factors, such as a change of gross domestic product, unemployment or inflation rate, but also by a bank specific factors, such as a level of profitability, amount of approved loans or capital level. After the financial crisis of 2008/2009, European union was exposed to the severe increase of the banks non-performing loan exposures. Certain countries, which were exposed to the high increase of non-performing loans ratio, were successful in quick decrease of these ratios, while certain countries were exposed to the high non-performing loans in the long run. Taking into account importance of banks in the financial system and loans as an external financing source in the European union, deterioration of banking assets quality impacted financial stability and economic recovery. This doctoral thesis researches determinants of the non-performing loans and economic impact of non-performing loans on financial stability in the European union. Sample consisted of all 27 member states for the period 2002 to 2019 based on aggregated annual data. To test determinants of non-performing loans, both macroeconomic and bank specific factors were modelled by the dynamic panel model, specifically generalized method of moments. Research results indicate that non-performing loans ratio is influenced by macroeconomic and bank specific variables, where increase of the GDP growth ratio and return on assets decreases non-performing loan ratio, while the increase of the inflation rate increases level of such loans. Higher bank cost to income ratio decreases non-performing loans, indicating that higher efficiency of the banking system does not decrease non-performing loans ratio. Economic impact of non-performing loans on financial stability was tested by the impulse response function and variance decomposition, methods of the panel vector autoregression. Variables which were used as a proxy of the financial stability include domestic credit to the private sector as s percentage of GDP, cost to income ratio, return on assets, GDP growth rate and inflation rate. To test the difference between member states with higher and lower non-performing loan ratio, countries were divided into two groups, with the threshold ratio of 5%. Analysis proved that increase of the non-performing loan ratio had a severe negative impact on the financial stability in countries with higher level of such loans. Research implications could be used by bank regulators and management. Rate of the inflation should be taken as the early warning predictor of non-performing loans, while increase of the bank cost to income ratio contributes to the decrease of non-performing ratio. Banks should therefore be very cautious in the period of crisis in reducing quality or number of employees in the loan approvement procedure. Taking into account stronger impact of non-performing loans on the financial stability in countries with higher non-performing loan ratio, which mostly did not introduce the countercyclical capital buffer, different approach to the calculation of this capital should be taken into account, as well as possible introduction of special loan countercyclical reservations. In the case of strong banking assets quality deterioration, regulators should impose quick and resolute measures, directed mostly to the removal (extractions) of non-performing loans from banks’ balance sheet and change of insolvency regulation. Future researches should focus on variables specific to the each individual loan, such as an interest rate, loan duration and collateral, and research determinants of different loan types (loans to the households, business loans,...), while the impact of the non-performing loans should be tested on individual banks’ level of efficiency and performance

Determinants of non-performing exposures and economic impact on the financial stability in the European union

Europska unija je, nakon financijske krize 2008./2009., bila izložena snažnom povećanju razine neprihodujućih kreditnih izloženosti banaka. S obzirom na značaj banaka u financijskom sustavu i kredita kao izvora financiranja ekonomske aktivnosti, pogoršanje kvalitete bankovne aktive doprinijelo je sporijem oporavku gospodarstva. Određene zemlje, koje su bile izložene snažnom rastu razine neprihodujućih kredita, relativno su brzo povećale kvalitetu bankovne aktive, dok su pojedine zemlje dugoročno ostale izložene vrlo visokim razinama neprihodujućih kredita. Doktorski rad istražuje odrednice nastanka neprihodujućih kreditnih izloženosti i ekonomske učinke povećanja neprihodujućih kreditnih izloženosti na financijsku stabilnost u Europskoj uniji. Za testiranje hipoteza koriste se generalizirana metoda momenata i panel vektorsko autoregresijski model. Rezultati istraživanja dokazuju kako na razinu neprihodujućih kreditnih izloženosti utječu makroekonomske i bankovno specifične odrednice. Analiza ekonomskih učinaka neprihodujućih kreditnih izloženosti pokazala je kako je porast neprihodujućih kreditnih izloženosti imao snažniji negativni utjecaj na financijsku stabilnost u zemljama s višim razinama neprihodujućih kreditnih izloženosti. Implikacije istraživanja mogu se koristiti od strane bankovnih regulatora i uprava. Stopu inflacije potrebno je uzeti u obzir prilikom predviđanja razine neprihodujućih kreditnih izloženosti, a povećanje odnosa operativnih troškova i prihoda doprinosi smanjenju neprihodujućih kredita. Banke bi stoga u kriznim vremenima trebale biti oprezne prilikom razmatranja smanjenja kvalitete metodologija i/ili zaposlenika u procedurama odobravanja kredita. S obzirom na snažniji utjecaj neprihodujućih kreditnih izloženosti na financijsku stabilnost u zemljama s višom razinom takvih izloženosti, a koje u pravilu nisu uvele protuciklički zaštitni sloj kapitala, potrebno je razmotriti drugačiji način izračuna navedenog sloja kapitala i/ili uvođenje posebnih kreditnih protucikličkih rezervacija. U slučaju naglog pogoršanja kvalitete kreditne aktive banaka, regulatori bi trebali donijeti brze i odlučne mjere, usmjerene primarno na izdvajanje kredita iz bilance banaka i promjene stečajnih zakona.Bank loans are the most important component of bank’ assets and income. Therefore, deterioration of bank’ loan quality, measured by the increase of non-performing exposures, impacts banks performance. Level of non-performing loans can be impacted by a macroeconomic factors, such as a change of gross domestic product, unemployment or inflation rate, but also by a bank specific factors, such as a level of profitability, amount of approved loans or capital level. After the financial crisis of 2008/2009, European union was exposed to the severe increase of the banks non-performing loan exposures. Certain countries, which were exposed to the high increase of non-performing loans ratio, were successful in quick decrease of these ratios, while certain countries were exposed to the high non-performing loans in the long run. Taking into account importance of banks in the financial system and loans as an external financing source in the European union, deterioration of banking assets quality impacted financial stability and economic recovery. This doctoral thesis researches determinants of the non-performing loans and economic impact of non-performing loans on financial stability in the European union. Sample consisted of all 27 member states for the period 2002 to 2019 based on aggregated annual data. To test determinants of non-performing loans, both macroeconomic and bank specific factors were modelled by the dynamic panel model, specifically generalized method of moments. Research results indicate that non-performing loans ratio is influenced by macroeconomic and bank specific variables, where increase of the GDP growth ratio and return on assets decreases non-performing loan ratio, while the increase of the inflation rate increases level of such loans. Higher bank cost to income ratio decreases non-performing loans, indicating that higher efficiency of the banking system does not decrease non-performing loans ratio. Economic impact of non-performing loans on financial stability was tested by the impulse response function and variance decomposition, methods of the panel vector autoregression. Variables which were used as a proxy of the financial stability include domestic credit to the private sector as s percentage of GDP, cost to income ratio, return on assets, GDP growth rate and inflation rate. To test the difference between member states with higher and lower non-performing loan ratio, countries were divided into two groups, with the threshold ratio of 5%. Analysis proved that increase of the non-performing loan ratio had a severe negative impact on the financial stability in countries with higher level of such loans. Research implications could be used by bank regulators and management. Rate of the inflation should be taken as the early warning predictor of non-performing loans, while increase of the bank cost to income ratio contributes to the decrease of non-performing ratio. Banks should therefore be very cautious in the period of crisis in reducing quality or number of employees in the loan approvement procedure. Taking into account stronger impact of non-performing loans on the financial stability in countries with higher non-performing loan ratio, which mostly did not introduce the countercyclical capital buffer, different approach to the calculation of this capital should be taken into account, as well as possible introduction of special loan countercyclical reservations. In the case of strong banking assets quality deterioration, regulators should impose quick and resolute measures, directed mostly to the removal (extractions) of non-performing loans from banks’ balance sheet and change of insolvency regulation. Future researches should focus on variables specific to the each individual loan, such as an interest rate, loan duration and collateral, and research determinants of different loan types (loans to the households, business loans,...), while the impact of the non-performing loans should be tested on individual banks’ level of efficiency and performance

Determinants of non-performing exposures and economic impact on the financial stability in the European union

Europska unija je, nakon financijske krize 2008./2009., bila izložena snažnom povećanju razine neprihodujućih kreditnih izloženosti banaka. S obzirom na značaj banaka u financijskom sustavu i kredita kao izvora financiranja ekonomske aktivnosti, pogoršanje kvalitete bankovne aktive doprinijelo je sporijem oporavku gospodarstva. Određene zemlje, koje su bile izložene snažnom rastu razine neprihodujućih kredita, relativno su brzo povećale kvalitetu bankovne aktive, dok su pojedine zemlje dugoročno ostale izložene vrlo visokim razinama neprihodujućih kredita. Doktorski rad istražuje odrednice nastanka neprihodujućih kreditnih izloženosti i ekonomske učinke povećanja neprihodujućih kreditnih izloženosti na financijsku stabilnost u Europskoj uniji. Za testiranje hipoteza koriste se generalizirana metoda momenata i panel vektorsko autoregresijski model. Rezultati istraživanja dokazuju kako na razinu neprihodujućih kreditnih izloženosti utječu makroekonomske i bankovno specifične odrednice. Analiza ekonomskih učinaka neprihodujućih kreditnih izloženosti pokazala je kako je porast neprihodujućih kreditnih izloženosti imao snažniji negativni utjecaj na financijsku stabilnost u zemljama s višim razinama neprihodujućih kreditnih izloženosti. Implikacije istraživanja mogu se koristiti od strane bankovnih regulatora i uprava. Stopu inflacije potrebno je uzeti u obzir prilikom predviđanja razine neprihodujućih kreditnih izloženosti, a povećanje odnosa operativnih troškova i prihoda doprinosi smanjenju neprihodujućih kredita. Banke bi stoga u kriznim vremenima trebale biti oprezne prilikom razmatranja smanjenja kvalitete metodologija i/ili zaposlenika u procedurama odobravanja kredita. S obzirom na snažniji utjecaj neprihodujućih kreditnih izloženosti na financijsku stabilnost u zemljama s višom razinom takvih izloženosti, a koje u pravilu nisu uvele protuciklički zaštitni sloj kapitala, potrebno je razmotriti drugačiji način izračuna navedenog sloja kapitala i/ili uvođenje posebnih kreditnih protucikličkih rezervacija. U slučaju naglog pogoršanja kvalitete kreditne aktive banaka, regulatori bi trebali donijeti brze i odlučne mjere, usmjerene primarno na izdvajanje kredita iz bilance banaka i promjene stečajnih zakona.Bank loans are the most important component of bank’ assets and income. Therefore, deterioration of bank’ loan quality, measured by the increase of non-performing exposures, impacts banks performance. Level of non-performing loans can be impacted by a macroeconomic factors, such as a change of gross domestic product, unemployment or inflation rate, but also by a bank specific factors, such as a level of profitability, amount of approved loans or capital level. After the financial crisis of 2008/2009, European union was exposed to the severe increase of the banks non-performing loan exposures. Certain countries, which were exposed to the high increase of non-performing loans ratio, were successful in quick decrease of these ratios, while certain countries were exposed to the high non-performing loans in the long run. Taking into account importance of banks in the financial system and loans as an external financing source in the European union, deterioration of banking assets quality impacted financial stability and economic recovery. This doctoral thesis researches determinants of the non-performing loans and economic impact of non-performing loans on financial stability in the European union. Sample consisted of all 27 member states for the period 2002 to 2019 based on aggregated annual data. To test determinants of non-performing loans, both macroeconomic and bank specific factors were modelled by the dynamic panel model, specifically generalized method of moments. Research results indicate that non-performing loans ratio is influenced by macroeconomic and bank specific variables, where increase of the GDP growth ratio and return on assets decreases non-performing loan ratio, while the increase of the inflation rate increases level of such loans. Higher bank cost to income ratio decreases non-performing loans, indicating that higher efficiency of the banking system does not decrease non-performing loans ratio. Economic impact of non-performing loans on financial stability was tested by the impulse response function and variance decomposition, methods of the panel vector autoregression. Variables which were used as a proxy of the financial stability include domestic credit to the private sector as s percentage of GDP, cost to income ratio, return on assets, GDP growth rate and inflation rate. To test the difference between member states with higher and lower non-performing loan ratio, countries were divided into two groups, with the threshold ratio of 5%. Analysis proved that increase of the non-performing loan ratio had a severe negative impact on the financial stability in countries with higher level of such loans. Research implications could be used by bank regulators and management. Rate of the inflation should be taken as the early warning predictor of non-performing loans, while increase of the bank cost to income ratio contributes to the decrease of non-performing ratio. Banks should therefore be very cautious in the period of crisis in reducing quality or number of employees in the loan approvement procedure. Taking into account stronger impact of non-performing loans on the financial stability in countries with higher non-performing loan ratio, which mostly did not introduce the countercyclical capital buffer, different approach to the calculation of this capital should be taken into account, as well as possible introduction of special loan countercyclical reservations. In the case of strong banking assets quality deterioration, regulators should impose quick and resolute measures, directed mostly to the removal (extractions) of non-performing loans from banks’ balance sheet and change of insolvency regulation. Future researches should focus on variables specific to the each individual loan, such as an interest rate, loan duration and collateral, and research determinants of different loan types (loans to the households, business loans,...), while the impact of the non-performing loans should be tested on individual banks’ level of efficiency and performance

Modernism: The Creation of Nation-States

This is the first part of the third volume of the four-volume series, a daring project of CEU Press, presenting the most important texts that triggered and shaped the processes of nation-building in the many countries of Central and Southeast Europe. The aim is to confront ‘mainstream’ and seemingly successful national discourses with each other, thus creating a space for analyzing those narratives of identity which became institutionalized as “national canons.” This is the first part of the third volume, containing 59 texts. This volume presents and illustrates the development of the ideologies of nation states, the “modern” successors of former empires. They exemplify the use modernist ideological framaeworks, from liberalism to socialism, in the context of the fundamental reconfiguration of the political system in this part of Europe between the 1860s and the 1930s. It also gives a panorama of the various solutions proposed for the national question in the region. Why, modernism and not modernity? Modernity implies the West, while modernism was the product of the periphery. The editors use it in a stricter sense, giving it a place between romanticism and anti-modernism, spanning from the 1860s until the decade following World War I.Contributors Nihad Dostović, Stevo Đurašković, Ildiko Erdei, Ahmet Ersoy, Maciej Górny, Rigels Halili, Nikola Iordanovski, Hamza Karčić, Vangelis Kechriotis, Ohannes Kılıçdağı, Michal Kopeček, Pavol Lukáč, Boyan Manchev, Mateja Ratej, Funda Soysal, Maria Todorova, Balázs Trencsényi, Marius Turda Consultants Bojan Aleksov, Sorin Antohi, Franz Leander Fillafer, Guido Franzinetti, Maciej Janowski, Pavel Kolář, Antonis Liakos, István Margócsy, Diana Mishkova, Bela Rasky, Petra Rybářová Translations by Alena Alexandrova (from Bulgarian), Elena Alexieva (from Bulgarian), Randy Blasing (from Turkish), Krištof Bodrič (from Serbian), Maurice Bowra (from Hungarian), Anna Bryson (from Czech), Jeremiah Curtin (from Polish), Amila Čelebić (from Bosnian), Robert Deveraux (from Turkish), Zornitsa Dimova-Hristova (from Bulgarian), Nihad Dostović (from Bosnian), Vedran Dronjić (from Serbian), Robert Elsie (from Albanian), Ahmet Ersoy (from Turkish), Leonard Fox (from Albanian), Simon Garnett (from German), Edward Dennis Goy (from Croatian), Şirin Güneşer (from Turkish), Rigels Halili (from Albanian), Kathleen Hayes (from Czech), Nikola Iordanovski (from Macedonian), Hamza Karčić (from Bosnian), Mary Kitroeff (from Greek), Ohannes Kılıçdağı (from Armenian), Mutlu Konuk (from Turkish), Mária Kovács (from Romanian), G. J. Kovtun (from Czech), Linda Krstajić (from Serbian), Jasna Levinger-Goy (from Croatian), Zuzanna Ładyga (from Polish), Pavol Lukáč (from Slovak), Adam Makkai (from Hungarian), Janice Mathie-Heck (from Albanian), W. L. McElwee (from German), Eric Mosbacher (from Polish), Joe O’Donnell (from German), Dávid Oláh (from Hungarian), Cecil Parrott (from Czech), Derek Paton (from Czech, Slovak, and German), Burton Pike (from German), Iva Polak (from Croatian), Robert Russell (from German and Czech), Henry Wickham Steed (from Croatian), A. J. P. Taylor (from German), Marius Turda (from Romanian), Alicia Tyszkiewicz (from Polish), Olga Vuković (from Slovene), Agnieszka Wierzcholska (from German), Sophie Wilkins (from German), Peter Zollman (from Hungarian) Copy-editor Benjamin Trigona-Haran