Purpose - The purpose of this study is twofold: To provide a general overview of the existing literature circulating the Non-Performing Loans (NPLs) in the European Banking System and to provide evidence of the future of European NPL developments, from the prism of the recent Covid-19 pandemic and the ESG (Environmental, Social, Governance) factors, placing the focus on the Greek banking sector. Design/methodology/approach - The research methodology implemented is a critical overview of the existing literature regarding NPLs, comprising of officially published papers. Due to the fact that both the Covid-19 pandemic & and the ESG factors are very recent, the papers included are mainly of theoretical nature. This paper provides a comprehensive overview of the NPL literature, placing the focus on the implications that the recent worldwide developments will have on NPL flows. Findings - The findings showed that Covid -19 is expected to negative impact the European NPLs. Moreover, the alterations due to the implementation of ESG factors will cause major effects to the European banking system, which are expected to withhold the upcoming the NPL level increase. Originality/value - This paper offers the first attempt, to the best of the authors’ knowledge, by analyzing the existing literature regarding Covid-19 & ESG, expected to have a profound impact on the NPLs stocks. It also provides a general overview of the expected impact of the two prementioned factors in the European NPLs, driven by the relative shortage of relevant research, while offering useful insights which contribute to a deeper understanding.

The article investigates the impact of the issuance of Tier 1 and Tier 2 regulatory capital by Greek banks for the period 2002-2020 on the return on assets (ROA), return on equity (ROE), leverage ratios (SLR) and liquidity and funding ratios (NSFR), by taking also into account the changes in the macroeconomic environment with variables such as GDP and unemployment. In this context, we perform data analysis on 14 systemic and non-systemic Greek banks and we find that capital ratios of banking institutions affect profitability, asset quality and earnings, liquidity and leverage. Bank size, loan-to-deposit ratio and NPLs ratio are important determinants of banks’ profitability. Finally, unemployment is an important exogenous determinant of profitability ratios.

Motivated by the growing demand for alternative investments that can be used forportfolio diversification, especially during inflationary environments, we investigate the volatility spillovers between Treasury Inflation Protected Securities (TIPS) and a battery of other assets perceived as inflation hedges, including bonds, gold, real estate, oil and equities. We also incorporate common macroeconomic and financial variables within the system that might have influenced the channel of volatility diffusion. The applied methodology comprehends the time-varying parameter vector autoregressive (TVPVAR) extension of the Diebold and Yilmaz (2012) approach, for the period between January 1, 2010 and March 31, 2022. Our results indicate that the assets under consideration are moderately interconnected and subjected to exogenous shocks, such as the US-China trade war, the COVID-19 pandemic and the Russia-Ukraine war. Furthermore, we assess the hedging effectiveness of TIPS against each asset by estimating hedge ratios and optimal portfolios weights, before and after the spread of COVID-19 pandemic, in order to instruct investors to adjust their asset allocation properly. The empirical findings show that the short position in the volatility of TIPS is proved to be an excellent hedge for all the sampled assets, with the exception of shortterm Treasury bonds, and their hedging ability was improved during COVID-19. Our analysis provides superior insights to the decision making of investors, asset managers and regulators.

This study examines the forecasting performance of the professional analysts participating in the Blue Chip Economic Indicators Survey using an alternative methodological research design. Specifically, we employ a panel specification, which takes into consideration both the time dimension and the forecast horizon, and a quantile regression technique, which evaluates the hidden non-monotonic relations between the forecasts and the target variables being forecasted. Evaluating the accuracy of economic forecasts is critical since they are widely used in financial, investment and policy decision making. Our empirical findings show that survey-based forecasts of interest rates and certain key macroeconomic variables are generally biased, but still efficient predictors of target variables. In particular, we find that survey participants are more efficient in predicting long-term interest rates in the long-run and short-term interest rates in the short-run, while the predictability of medium-term interest rates is the least accurate. Finally, our empirical analysis suggests that currency fluctuations are very hard to predict in the short-run, while we show that survey-based forecasts are among the most accurate predictors of key macroeconomic variables.