Only recently has the debate on bank
capital regulation devoted specific attention to the role
that bank loan loss provisions can play as part of a minimum
capital regulatory framework. Several national regulators
have adopted or are planning to introduce a cyclically
adjustable requirement for loan loss provisions, and the
Basel Committee on Banking Supervision is considering how to
provide adequate treatment to provisioning practices within
a broad bank capital regulatory framework. The authors
contribute to the ongoing debate by exploring the available
evidence about bank provisioning practices around the world.
They find that in the vast majority of cases banks tend to
delay provisioning for bad loans until it is too late-when
cyclical downturns have already set in-possibly magnifying
the impact of the economic cycle on the income and capital
of banks. Notwithstanding the considerable variation in the
patterns followed by banks around the world, Laeven and
Majnoni find that the size and timing of provisions tend to
improve with the level of economic development.
Bibliographic Details
| Main Authors: |
Laeven, Luc,
Majnoni, Giovanni |
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| Format: | Policy Research Working Paper
biblioteca
|
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2001-12
|
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| Subjects: | ACCOUNTING PRACTICES,
AGENTS,
ARBITRAGE,
BALANCE SHEET,
BALANCE SHEET INFORMATION,
BALANCE SHEETS,
BANK CAPITAL,
BANK EARNINGS,
BANK LENDING,
BANK LIABILITIES,
BANK LOANS,
BANK PROFITS,
BANK REGULATION,
BANK RISK,
BANK SUPERVISION,
BANKING SUPERVISION,
BANKING SYSTEMS,
BANKS,
BONDS,
CAPITAL REGULATION,
CAPITAL REQUIREMENT,
CAPITAL REQUIREMENTS,
CAPITAL STANDARDS,
COMMERCIAL BANKS,
CONSUMER PRICE INDEX,
CREDIT RISK,
CREDIT RISKS,
DISCLOSURE,
ECONOMETRIC EVIDENCE,
EXTERNALITIES,
FINANCIAL INSTITUTIONS,
FINANCIAL REGULATION,
FINANCIAL SECTOR,
FINANCIAL SERVICES,
FINANCIAL STABILITY,
FINANCIAL SYSTEMS,
GDP,
GDP PER CAPITA,
GOVERNMENT BONDS,
GROSS DOMESTIC PRODUCT,
GROWTH RATE,
INTEREST INCOME,
INTEREST RATE,
LIQUIDITY,
LOAN LOSS PROVISIONS,
LOSS RATIO,
MACROECONOMIC SHOCKS,
MINIMUM SOLVENCY RATIOS,
NEGATIVE EXTERNALITIES,
OPERATING COSTS,
PORTFOLIO,
PROBLEM LOANS,
PRUDENTIAL REQUIREMENTS,
REAL GDP,
REAL SECTOR,
REGULATORY FRAMEWORK,
REGULATORY REGIMES,
RESERVES,
RETAINED EARNINGS,
RISK MANAGEMENT,
RISK PREMIUM,
RISK TAKING,
RISK WEIGHTED ASSETS,
RISK-WEIGHTED ASSETS,
SMALL BANKS,
SOLVENCY,
SOLVENCY RATIO,
SOLVENCY RATIOS,
SUBSIDIARY,
TIER 1 CAPITAL,
TIER 2 CAPITAL, |
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| Online Access: | http://documents.worldbank.org/curated/en/2001/12/1671257/loan-loss-provisioning-economic-slowdowns-too-much-too-late
http://hdl.handle.net/10986/19410
|
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