bank specific drivers of NPL for each licensed category. Z-Score is constructed to proxy banking stability, and its … response to shocks NPLs is examined in a panel vector autoregressive framework. The results reveal that drivers of NPLs vary …

decrease a bank's incentive to take risk with its remaining ineligible assets. A greater capacity to respond to liquidity … stress increases the potential profits a bank would put at stake by making risky investments, but it also mitigates the … illiquidity disadvantages of holding risky assets. We then empirically estimate the effect of two liquidity regulations on bank …