Loan Review, Provisioning, and Macroeconomic Linkages
32 Pages Posted: 6 Feb 2006
There are 2 versions of this paper
Loan Review, Provisioning, and Macroeconomic Linkages
Loan Review, Provisioning, and Macroeconomic Linkages
Date Written: December 2000
Abstract
Loan review is a process routinely used by banks to assess the current value of loan portfolios. Provisioning is a technique to translate loan review results into the balance sheet. It allows for ongoing valuation of loans. Both are core elements of credit risk management and important to prudential oversight. As illustrated in this paper, valuation feeds into indicators of overall bank soundness and key macroprudential indicators. Country practices and recent moves to more forward-looking models are surveyed, Macroeconomic linkages are highlighted, including tax treatment of provisions, variables of the monetary survey, and procyclical aspects of loan valuation systems.
Keywords: Nonperforming loans, cyclical bank behavior, capital ratios
JEL Classification: E5, G2, H25, K2, 016
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
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, ...
-
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
-
Drivers of Credit Losses in Australasian Banking
By Kurt Hess, Arthur Grimes, ...