Loan loss provisioning practices of Asian banks
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.
|Date of creation:||Apr 2012|
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- Vincent Bouvatier & Laetitia Lepetit, 2006.
"Banks'procyclicality behavior : does provisioning matter ?,"
Cahiers de la Maison des Sciences Economiques
bla06035, Université Panthéon-Sorbonne (Paris 1).
- Vincent Bouvatier & Laetitia Lepetit, 2006. "Banks' procyclicality behavior : does provisioning matter ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00115622, HAL.
- Madhusudan Mohanty & Philip Turner, 2010. "Banks and financial intermediation in emerging Asia: reforms and new risks," BIS Working Papers 313, Bank for International Settlements.
- J.A. Bikker & P.A.J. Metzemakers, 2002.
"Bank provisioning behaviour and procyclicality,"
Research Series Supervision (discontinued)
50, Netherlands Central Bank, Directorate Supervision.
- 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.
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