Deleveraging in the Banking Sector

• Authors: Joanna Cichorska
• Languages of publication: EN

Abstracts

EN

A symptom of the financial crisis in the banking system was an increase in credit risk, which has become an expression of increasing the share of the loan portfolio of non-performing loans on time. The resulting losses were not sufficiently covered by equity, which proved to be insufficient against the increasing difficulties. Increasing the risk of default led to the development of the new capital adequacy ratio known as Basel III, which implies an increase in equity of commercial banks. This process is practically impossible in a short time, especially for medium-sized and small banks. Therefore, banks are forced, to limit their active operations, mainly by reducing lending and sales of treasury bonds of countries with a low credit rating. This process is called deleveraging. (original abstract)

Keywords

EN

Credit risk; Banking system; Commercial banks; Financial crisis; Rating

PL

Ryzyko kredytowe; System bankowy; Banki komercyjne; Kryzys finansowy; Rating

• Publisher: Uniwersytet Ekonomiczny w Katowicach
• Journal: Journal of Economics and Management
• Year: 2014
• Volume: 16
• Pages: 5-15

Contributors

author

Joanna Cichorska

References

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Identifiers

ISSN

1732-1948