01982cas a2200253 a 4500 AALejournalIMF011733 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475502237 1018-5941 BD-DhAAL BD-DhAAL De Bock, Reinout. Bank Asset Quality in Emerging Markets : Determinants and Spillovers / Reinout De Bock, Alexander Demyanets. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper assesses the vulnerability of emerging markets and their banks to aggregate shocks. We find significant links between banks' asset quality, credit and macroeconomic aggregates. Lower economic growth, an exchange rate depreciation, weaker terms of trade and a fall in debt-creating capital inflows reduce credit growth while loan quality deteriorates. Particularly noteworthy is the sharp deterioration of balance sheets following a reversal of portfolio inflows. We also find evidence of feedback effects from the financial sector on the wider economy. GDP growth falls after shocks that drive non-performing loans higher or generate a contraction in credit. This analysis was used in chapter 1 of the Global Financial Stability Report (September 2011) to help evaluate the sensitivity of banks' capital adequacy ratios to macroeconomic and funding cost shocks. Mode of access: Internet Demyanets, Alexander. IMF Working Papers; Working Paper ; No. 2012/071 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/071/001.2012.issue-071-en.xml IMF e-Library