Crisis Lessons Relearned: Uncertainty, Credit Tightening, and Default Dynamics from 2008 to COVID-19

Crisis Lessons Relearned: Uncertainty, Credit Tightening, and Default Dynamics from 2008 to COVID-19 | Authorea try { document.documentElement.classList.add('js'); } catch (e) { } var _gaq = _gaq || []; _gaq.push(['_setAccount', 'G-8VDV14Y67G']); _gaq.push(['_trackPageview']); (function() { var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true; ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s); })(); Skip to main content Preprints Collections Wiley Open Research IET Open Research Ecological Society of Japan All Collections About About Authorea FAQs Contact Us Quick Search anywhere Search for preprint articles, keywords, etc. Search Search ADVANCED SEARCH SCROLL This is a preprint and has not been peer reviewed. Data may be preliminary. 18 August 2025 V1 Latest version Share on Crisis Lessons Relearned: Uncertainty, Credit Tightening, and Default Dynamics from 2008 to COVID-19 Authors : Irine T Angela 0009-0003-8552-1066 [email protected] and Irine Tahjiba Authors Info & Affiliations https://doi.org/10.22541/au.175555001.11616374/v1 89 views 69 downloads Contents Abstract Supplementary Material Information & Authors Metrics & Citations View Options References Figures Tables Media Share Abstract Successive shocks from the Global Financial Crisis and COVID-19, renewed U.S.-China trade tensions under the Trump administration, and rapid advances in AI have contributed to geoeconomic uncertainty becoming a central factor in decision-making and planning within the financial sector. However, to date, systematic evidence linking economic policy uncertainty (EPU) to banking-sector risk and performance outcomes remains limited. This study synthesises evidence on how EPU affects bank credit risk by drawing from nine empirical studies spanning both advanced and emerging economies. The study identifies three consistent patterns across all the studies. First, a higher EPU is associated with higher NPL ratios. Second, bank characteristics (e.g., solvency, profitability, size/ownership) and market structure (concentration) mediate the effect of uncertainty on NPLs. Third, information transparency and digital transformation are crucial tools for mitigating the adverse effects of uncertainty on credit default risk. "The probability of a banking crisis (beginning) conditional on financial liberalisation is higher than the unconditional probability." Kaminsky and Reinhart, 1999. Supplementary Material File (crisis lessons relearned.pdf) Download 421.80 KB Information & Authors Information Version history V1 Version 1 18 August 2025 Copyright This work is licensed under a Non Exclusive No Reuse License. Keyword how economic policy uncertainty influence non- performing loans Authors Affiliations Irine T Angela 0009-0003-8552-1066 [email protected] View all articles by this author Irine Tahjiba Western Sydney University View all articles by this author Metrics & Citations Metrics Article Usage 89 views 69 downloads .FvxKWukQNSOunydq8rnd { width: 100px; } Citations Download citation Irine T Angela, Irine Tahjiba. Crisis Lessons Relearned: Uncertainty, Credit Tightening, and Default Dynamics from 2008 to COVID-19. Authorea . 18 August 2025. DOI: https://doi.org/10.22541/au.175555001.11616374/v1 If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download. For more information or tips please see 'Downloading to a citation manager' in the Help menu . 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