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Loan loss reserves

Author

Listed:
  • John R. Walter

Abstract

Recent years have seen bank loan losses exceeded only by those of the Great Depression. This experience, along with tax and regulatory changes, has triggered changes in the reserve account through which banks provide for such losses.

Suggested Citation

  • John R. Walter, 1991. "Loan loss reserves," Economic Review, Federal Reserve Bank of Richmond, issue Jul, pages 20-30.
  • Handle: RePEc:fip:fedrer:y:1991:i:jul:p:20-30:n:v.77no.4
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich199107.pdf
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    References listed on IDEAS

    as
    1. Berger, Allen N. & King, Kathleen Kuester & O'Brien, James M., 1991. "The limitations of market value accounting and a more realistic alternative," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 753-783, September.
    2. Benston, George J & Marlin, John Tepper, 1974. "Bank Examiners' Evaluation of Credit: An Analysis of the Usefulness of Substandard Loan Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(1), pages 23-44, February.
    3. Grammatikos, Theoharry & Saunders, Anthony, 1990. "Additions to bank loan-loss reserves : Good news or bad news?," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 289-304, March.
    4. Graham, David R & Humphrey, David Burras, 1978. "Bank Examination Data as Predictors of Bank Net Loan Losses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(4), pages 491-504, November.
    5. Bird, G., 1989. "Loan-Loss Provisions And Third-World Debt," Princeton Studies in International Economics 176, International Economics Section, Departement of Economics Princeton University,.
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    Citations

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    Cited by:

    1. Jeffery W. Gunther & Robert R. Moore, 2000. "Financial statements and reality: do troubled banks tell all?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q3, pages 30-35.
    2. Vincent Bouvatier & Lætitia Lepetit, 2011. "Canal des provisions bancaires et cyclicité du marché du crédit," Revue économique, Presses de Sciences-Po, vol. 62(1), pages 67-85.
    3. Anatoli Kuprianov, 1997. "Tax disincentives to commercial bank lending," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 67-97.
    4. Vasiliki Makri, 2016. "Towards an Investigation of Credit Risk Determinants in Eurozone Countries," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(1), pages 27-57, March.
    5. repec:wsi:afexxx:v:12:y:2017:i:03:n:s2010495217500130 is not listed on IDEAS
    6. Vasiliki MAKRI & Konstantinos PAPADATOS, 2016. "Determinants Of Loan Quality: Lessons From Greek Cooperative Banks," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 115-140, June.
    7. Christopher C. Henderson, 1999. "The Economic Performance of African-American-Owned Banks: The Role of Loan Loss Provisions," American Economic Review, American Economic Association, vol. 89(2), pages 372-376, May.
    8. Larry D. Wall & Timothy W. Koch, 2000. "Bank loan-loss accounting: a review of theoretical and empirical evidence," Economic Review, Federal Reserve Bank of Atlanta, issue Q2, pages 1-20.
    9. Peek, Joe & Rosengren, Eric, 1995. "The Capital Crunch: Neither a Borrower nor a Lender Be," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(3), pages 625-638, August.
    10. Eliana Balla & Morgan J. Rose, 2011. "Loan loss reserves, accounting constraints, and bank ownership structure," Working Paper 11-09, Federal Reserve Bank of Richmond.
    11. Bouvatier, Vincent & Lepetit, Laetitia, 2012. "Provisioning rules and bank lending: A theoretical model," Journal of Financial Stability, Elsevier, vol. 8(1), pages 25-31.
    12. Joe Peek & Eric S. Rosengren, 1992. "The capital crunch in New England," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 21-31.
    13. L. Smith & Baiqiang Jin, 2007. "Modeling exposure to losses on automobile leases," Review of Quantitative Finance and Accounting, Springer, vol. 29(3), pages 241-266, October.
    14. Paola Dongili & Angelo Zago, 2005. "Bad loans and efficiency in Italian Banks," Working Papers 28/2005, University of Verona, Department of Economics.
    15. Eliana Balla & Andrew McKenna, 2009. "Dynamic provisioning: a countercyclical tool for loan loss reserves," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 383-418.
    16. Houston, Joel & James, Christopher & Marcus, David, 1997. "Capital market frictions and the role of internal capital markets in banking," Journal of Financial Economics, Elsevier, vol. 46(2), pages 135-164, November.
    17. Agénor, Pierre-Richard & Zilberman, Roy, 2015. "Loan Loss Provisioning Rules, Procyclicality, and Financial Volatility," Journal of Banking & Finance, Elsevier, vol. 61(C), pages 301-315.
    18. Ghosh Saibal, 2015. "Provisioning, Bank Behavior and Financial Crisis: Evidence from GCC Banks," Review of Middle East Economics and Finance, De Gruyter, vol. 11(3), pages 249-275, December.
    19. Houston, Joel F. & James, Christopher, 1998. "Do bank internal capital markets promote lending?," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 899-918, August.
    20. Vasiliki Makri, 2015. "What Triggers Loan Losses? An Empirical Investigation of Greek Financial Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 65(3-4), pages 119-143, july-Dece.
    21. R. Alton Gilbert, 1993. "Implications of annual examinations for the Bank Insurance Fund," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 35-52.

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    Keywords

    Bank loans;

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