Research on the Relationship between Non-Performing Loans and Economic Development of Financial Institutions

Yansong Zheng

School of Finance, Anhui University of Finance and Economics, Bengbu, 233030, China

Abstract: In Recent years, with the rapid development of China's economy, the financial industry has also achieved rapid development. But at the same time, the problem of credit risk in the financial industry has gradually increased, and the non-performing loans of financial institutions have continued to rise in recent years. The increase of non-performing loans will have a negative impact on the macroeconomic development. Therefore, based on the least square method, this paper makes linear regression between GDP and non- performing loans, and finds that the increase of GDP will lead to the increase of non-performing loans. Based on the research results, this paper puts forward reasonable suggestions on how to reduce non-performing loans of financial institutions and promote economic development, in order to provide a reasonable basis for the sustainable development of China's economy.

Keywords: Linear regression; Least square method; Non performing loans; Economicdevelopment