Problem Loans in the Caribbean : Determinants, Impact and Strategies for Resolution /

The high level of nonperforming loans (NPLs) in the Caribbean has been, in large part, a legacy of the global financial crisis, but their persistence owes much to the weak economic recovery in the region, as well as to structural obstacles to their resolution. A comprehensive strategy is needed to a...

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Bibliographic Details
Main Author: Beaton, Kimberly
Other Authors: Dowling, Thomas, Kovtun, Dmitriy, Loyola, Franz
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2017.
Series:IMF Working Papers; Working Paper ; No. 2017/230
Online Access:Full text available on IMF
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245 1 0 |a Problem Loans in the Caribbean :   |b Determinants, Impact and Strategies for Resolution /  |c Kimberly Beaton, Thomas Dowling, Dmitriy Kovtun, Franz Loyola. 
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520 3 |a The high level of nonperforming loans (NPLs) in the Caribbean has been, in large part, a legacy of the global financial crisis, but their persistence owes much to the weak economic recovery in the region, as well as to structural obstacles to their resolution. A comprehensive strategy is needed to address these impediments to sever the adverse feedback loops between weak economic activity and weak asset quality. This paper finds that NPLs are a drag on Caribbean growth and macro-financial links are strong: a deterioration in asset quality hinders bank lending and dampens economic activity, undermining, in turn, efforts to resolve problem loans. A multifaceted approach is needed, involving a combination of macro- economic policies to support growth and employment; strong supervisory frameworks to ensure macro-financial stability and create incentives for resolution; efforts to address informational gaps and deficiencies in insolvency and debt-enforcement frameworks; and development of markets for distressed loans. The institutional capacity constraints require coordination of reforms within the region and support from international organizations through capacity-building. 
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700 1 |a Dowling, Thomas. 
700 1 |a Kovtun, Dmitriy. 
700 1 |a Loyola, Franz. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2017/230 
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