IDEAS home Printed from https://ideas.repec.org/a/sgh/annals/i34y2014p183-196.html
   My bibliography  Save this article

Credit policy in small Polish banks - is there room for income smoothing?

Author

Listed:
  • Dorota Skała

    (Uniwersytet Szczeciński)

Abstract

We study credit policy in a unique sample of c.360 Polish cooperative banks between 2007–2012. We find evidence for income smoothing through loan loss provisions, indicating that cooperative banks take advantage of higher earnings to make reserves for periods when their profitability might decrease. Similarly to commercial banks, provisions of cooperative banks are procyclical towards the macroeconomic cycle. When regional economic conditions deteriorate, cooperative banks increase their provisioning and this is especially visible when the economic slumps are severe. These results indicate that the different shareholder structure of cooperative banks does not affect managerial incentives for income smoothing. Thus, problems of cyclicality in the cooperative sector should be addressed by local policymakers in the same extent as that of cyclicality in the commercial banking sector.

Suggested Citation

  • Dorota Skała, 2014. "Credit policy in small Polish banks - is there room for income smoothing?," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 34, pages 183-196.
    • Handle: RePEc:sgh:annals:i:34:y:2014:p:183-196
    as

    Download full text from publisher

    File URL: http://rocznikikae.sgh.waw.pl/p/roczniki_kae_z34_12.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Forgione, Antonio Fabio & Migliardo, Carlo, 2018. "Forecasting distress in cooperative banks: The role of asset quality," International Journal of Forecasting, Elsevier, vol. 34(4), pages 678-695.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sgh:annals:i:34:y:2014:p:183-196. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michał Bernardelli (email available below). General contact details of provider: https://edirc.repec.org/data/sgwawpl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.