NON-PERFORMING LOANS DURING WAR-INDUCED SHOCKS AND THEIR REGULATION IN UKRAINE IN THE CONTEXT OF EU INTEGRATION
DOI:
https://doi.org/10.35774/jee2026.03.656Keywords:
Bayesian ARDL, European integration, lagged effects, macroeconomic instability, non-performing loans, Ukraine’s economy, wartime shocks.Abstract
Key macroeconomic determinants of non-performing loan (NPL) dynamics under war-induced shocks and Ukraine’s ongoing adaptation of its banking sector to European Union (EU) regulatory standards have been identified. The analysis employs a Bayesian autoregressive distributed lag (ARDL) model estimated using 79 quarterly observations over the period 2006–2025, allowing the integration of probabilistic parameter estimation with a dynamic lag structure under conditions of multiple structural breaks. The results reveal statistically and economically significant lagged effects of real GDP growth, the consumer price index, the National Bank of Ukraine’s policy rate, and average wages on NPL dynamics. The military shocks of 2014 and 2022 exert pronounced but temporally differentiated impacts on the NPL accumulation, reflecting distinct phases of banking sector stress and institutional adaptation. The findings provide policy-relevant approaches to enhancing banking sector resilience through harmonisation with EU standards and to mitigating systemic credit risks in the course of Ukraine’s post-war recovery.
JEL: C11, E44, E52, G21, H56, P24.
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Received: January 5, 2026.
Reviewed: July 15, 2026.
Accepted: August 28, 2026.
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