Loan loss provisioning practices of Asian banks
AbstractIn 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank for International Settlements in its series BIS Working Papers with number 375.
Length: 31 pages
Date of creation: Apr 2012
Date of revision:
Loan loss provisioning; financial system procyclicality; international accounting standards; earnings smoothing; macroprudential policy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
- NEP-BAN-2012-04-17 (Banking)
- NEP-CBA-2012-04-17 (Central Banking)
- NEP-CWA-2012-04-17 (Central & Western Asia)
- NEP-SEA-2012-04-17 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vincent Bouvatier & Laetitia Lepetit, 2006.
"Banks' procyclicality behavior : does provisioning matter ?,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
- Vincent Bouvatier & Laetitia Lepetit, 2006. "Banks'procyclicality behavior : does provisioning matter ?," Cahiers de la Maison des Sciences Economiques bla06035, Université Panthéon-Sorbonne (Paris 1).
- Bikker, J.A. & Metzemakers, P.A.J., 2005.
"Bank provisioning behaviour and procyclicality,"
Journal of International Financial Markets, Institutions and Money,
Elsevier, vol. 15(2), pages 141-157, April.
- Jacob A. Bikker & Paul A.J. Metzemakers, 2003. "Bank Provisioning Behaviour and Procyclicality," DNB Staff Reports (discontinued) 111, Netherlands Central Bank.
- J.A. Bikker & P.A.J. Metzemakers, 2002. "Bank provisioning behaviour and procyclicality," Research Series Supervision (discontinued) 50, Netherlands Central Bank, Directorate Supervision.
- Madhusudan Mohanty & Philip Turner, 2010. "Banks and financial intermediation in emerging Asia: reforms and new risks," BIS Working Papers 313, Bank for International Settlements.
- John Bonin & Marko Kosak, 2013. "Loan/Loss Provisioning in Emerging Europe: Precautionary or Pro-Cyclical?," Wesleyan Economics Working Papers 2013-010, Wesleyan University, Department of Economics.
- Jan FRAIT & Zlatuše KOMÁRKOVÁ, 2013. "Loan Loss Provisioning in Selected European Banking Sectors: Do Banks Really Behave in a Procyclical Way?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(4), pages 308-326, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Timo Laurmaa).
If references are entirely missing, you can add them using this form.