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Loans that have not been repaid are generally called "non-performing loans" or NPL. Each country's bank regulatory body should have statistics on this. Here's one from the World Bank. Note that this is the ratio between outstanding NPL and total outstanding loans. The ratio could go down if the borrower agrees to continue paying back, or if the banks decide ...

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Speaking in the accounting language, it would not affect assets. As employees work and deliver their services, that creates a liability and personnel costs to the bank. So the bank would book DR Personnel Costs in P&L CR Salaries Payable. Come payroll day, it would make a second journal entry DR Salaries Payable CR Due to Customers (e.g. Salary account, ...

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If you have an estimate of the probabilities of each scenario, say with probability $p\in[0,1]$ the loan is repaid (assuming no other scenario exists), then you can calculate the expected value of making the loan of size $L$: In scenario 1, payoff is $-L+(1+0.05)L=0.05L$ (giving out $L$ and getting back the principal plus interest) In scenario 2, payoff is ...

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I don't know if your statements are true. By what margin is the German stock market small? And the only bank that did matter on the international level (Deutsche Bank) is far from being large and powerful. That being said, your notion might have to do with the fact how the German economy has been organized since WWII. The Rhine capitalism used to be, among ...

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