ACCOUNTING VALUATION AND CREDIT RISK MANAGEMENT: AN ECONOMETRIC ANALYSIS OF NON-PERFORMING LOANS IN THE ROMANIAN BANKING SYSTEM

Abstract

This paper investigates the factors influencing the evolution of non-performing loans in the Romanian banking system and aims to develop an econometric model based on quarterly data from 2014-2024. Among the variables analyzed, return on assets and unemployment rate are the most influential factors in the evolution of the non-performing loan (NPL) rate, suggesting a direct link between economic performance, labor market dynamics and loan portfolio quality. In contrast, inflation has a minor impact. The study also traces the accounting transition from the incurred loss model (IAS39) to the expected loss model (IFRS 9), showing that the implementation of IFRS 9 has contributed to a reduction in the NPL ratio, demonstrating increased efficiency in credit risk management.