Loan Loss Provisioning Practices of Asian Banks
31 Pages Posted: 11 Apr 2012 Last revised: 29 Aug 2012
Date Written: April 1, 2012
Abstract
In the wake of the Asian financial crisis, many regimes in Asia adopted stricter provisioning requirements, as well as discretionary measures, with the objective of increasing provisioning in good times in response to rising levels of risk. Based on a final sample of 240 banks in 12 Asian economies, the evidence is that countercyclical loan loss provisioning has dominated throughout emerging Asia, most strikingly so in the case of India. Thus, loan loss provisioning did not simply become more conservative at all points in time subsequent to the Asian financial crisis, but actively leaned in a fashion that ameliorated swings in earnings and the macroeconomy.
Keywords: loan loss provisioning, financial system procyclicality, international accounting standards, earnings smoothing, macroprudential policy
JEL Classification: G21, G28
Suggested Citation: Suggested Citation
0 References
0 Citations
Do you have a job opening that you would like to promote on SSRN?

- Citations
- Citation Indexes: 24
- Policy Citations: 1
- Usage
- Abstract Views: 3196
- Downloads: 836
- Captures
- Readers: 80

- Citations
- Citation Indexes: 24
- Policy Citations: 1
- Usage
- Abstract Views: 3196
- Downloads: 836
- Captures
- Readers: 80
Recommended Papers
-
Do Banks Provision for Bad Loans in Good Times? Empirical Evidence and Policy Implications
By Michele Cavallo and Giovanni Majnoni
-
The Provisioning Experience of the Major UK Banks: A Small Panel Investigation
By Darren Pain
-
Banks' Riskiness Over the Business Cycle: A Panel Analysis on Italian Intermediaries
-
Loan Review, Provisioning, and Macroeconomic Linkages
By Luis Cortavarria-checkley, Claudia Dziobek, ...
-
Loan Review, Provisioning, and Macroeconomic Linkages
By Luis Cortavarria-checkley, Claudia Dziobek, ...
-
Dynamic Provisioning: Rationale, Functioning, and Prudential Treatment
By Marco Burroni, Mario Quagliariello, ...
-
Dynamic Provisioning: Rationale, Functioning, and Prudential Treatment
By Marco Burroni, Mario Quagliariello, ...
-
Credit Derivatives: Just-in-Time Provisioning for Loan Losses
-
Issues and Developments in Loan Loss Provisioning: The Case of Asia
By Sarawan Angklomkliew, Jason George, ...
-
Dynamic Provisioning: A Countercyclical Tool for Loan Loss Reserves
By Eliana Balla and Andrew B. Mckenna