Table of Contents
The house price bank stability relationship was empirically investigated based on 2008–2018 data from 24 European countries. Since the 2008 financial crisis, house price has been an important indicator for assessing the state of the European economy and bank stability. Herein, the author argues that the increase in house prices in European countries may improve the nonperforming loan (NPL) ratios and banking stability may increase. The dynamic panel data analysis results in this study revealed the existence of a negative NPL ratio–house price index relationship in both the long and short run. In conclusion, after the 2008 financial crisis, European housing markets were essential to ensuring banking stability.