Banking system asset quality and the economic cycle: an econometric approach for the Peruvian case (Preliminary version for internal discussion)

It studies the impact of individual banking and macroeconomic factors on the quality of banking assets, based on econometric methods using panel data. Empirical evidence for the Peruvian case from 1993 to 1996 indicates that the quality of banking institutions’ loan portfolios is significantly influenced by fluctuations in the economic cycle and the credit boom.