We investigate the causal relationship between the efficiency of country's judicial system and the quality of bank lending, using the contracts enforcement reforms implemented in four European countries as a quasi-natural experiment. We find that strengthening contracts enforcement determines large, significant and persistent reductions in banks' nonperforming loans. Our results have important policy implications: they point at judicial efficiency as a critical determinant of the stability of the banking sector and its resilience to adverse shocks such as the recent Covid-19 pandemic.

中文翻译：

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贷款质量和合同执行改革

我们利用四个欧洲国家实施的合同执行改革作为准自然实验，研究了国家司法系统效率与银行贷款质量之间的因果关系。我们发现，加强合同执行决定了银行不良贷款的大幅、显着和持续减少。我们的研究结果具有重要的政策意义：它们指出司法效率是银行业稳定及其抵御最近的 Covid-19 大流行等不利冲击的能力的关键决定因素。