The Effect Of Covid 19 On Loan Loss Provisions And Earnings Management Of European Banks
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The Effect Of Covid 19 On Loan Loss Provisions And Earnings Management Of European Banks
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Author : Merjona Lamaj
language : en
Publisher: Springer Nature
Release Date : 2023-01-12
The Effect Of Covid 19 On Loan Loss Provisions And Earnings Management Of European Banks written by Merjona Lamaj and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-01-12 with Business & Economics categories.
This book examines the effect of Covid-19 on loan loss provisions (LLPs) and earnings management of European banks. Specifically, the author analyzes how the high flexibility offered by prudential authorities and standard setters in the context of Covid-19 affects banks’ use of discretion when accounting for loan loss provisions. She finds that during Covid-19 banks use discretionary LLPs to a greater extent than before Covid-19. This trend is more evident for banks located in countries that have implemented strong containment measures as a response to the Covid-19 pandemic. Moreover, while banks tend to overstate LLPs at the beginning of the pandemic, they do, on average, understate them during 2021. Finally, examining the direction of earnings management the author finds that during Covid-19 banks use upward earnings management, whereas before Covid-19 they engage in downward earnings management.
Covid 19 How Will European Banks Fare
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Author : Mr.Shekhar Aiyar
language : en
Publisher: International Monetary Fund
Release Date : 2021-03-26
Covid 19 How Will European Banks Fare written by Mr.Shekhar Aiyar and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-03-26 with Business & Economics categories.
This paper evaluates the impact of the crisis on European banks’ capital under a range of macroeconomic scenarios, using granular data on the size and riskiness of sectoral exposures. The analysis incorporates the important role of pandemic-related policy support, including not only regulatory relief for banks, but also policies to support businesses and households, which act to shield the financial sector from the real economic shock.
Bank Loan Classification And Provisioning Practices In Selected Developed And Emerging Countries
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Author : Alain Laurin
language : en
Publisher: World Bank Publications
Release Date : 2003
Bank Loan Classification And Provisioning Practices In Selected Developed And Emerging Countries written by Alain Laurin and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Bank loans categories.
Global Financial Stability Report October 2020
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2020-10-23
Global Financial Stability Report October 2020 written by International Monetary Fund. Monetary and Capital Markets Department and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-10-23 with Business & Economics categories.
Near-term global financial stability risks have been contained as an unprecedented policy response to the coronavirus (COVID-19) pandemic has helped avert a financial meltdown and maintain the flow of credit to the economy. For the first time, many emerging market central banks have launched asset purchase programs to support the smooth functioning of financial markets and the overall economy. But the outlook remains highly uncertain, and vulnerabilities are rising, representing potential headwinds to recovery. The report presents an assessment of the real-financial disconnect, as well as forward-looking analysis of nonfinancial firms, banks, and emerging market capital flows. After the outbreak, firms’ cash flows were adversely affected as economic activity declined sharply. More vulnerable firms—those with weaker solvency and liquidity positions and smaller size—experienced greater financial stress than their peers in the early stages of the crisis. As the crisis unfolds, corporate liquidity pressures may morph into insolvencies, especially if the recovery is delayed. Small and medium-sized enterprises (SMEs) are more vulnerable than large firms with access to capital markets. Although the global banking system is well capitalized, some banking systems may experience capital shortfalls in an adverse scenario, even with the currently deployed policy measures. The report also assesses the pandemic’s impact on firms’ environmental performance to gauge the extent to which the crisis may result in a reversal of the gains posted in recent years.
Ratings Rating Agencies And The Global Financial System
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Author : Richard M. Levich
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Ratings Rating Agencies And The Global Financial System written by Richard M. Levich and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.
Ratings, Rating Agencies and the Global Financial System brings together the research of economists at New York University and the University of Maryland, along with those from the private sector, government bodies, and other universities. The first section of the volume focuses on the historical origins of the credit rating business and its present day industrial organization structure. The second section presents several empirical studies crafted largely around individual firm-level or bank-level data. These studies examine (a) the relationship between ratings and the default and recovery experience of corporate borrowers, (b) the comparability of credit ratings made by domestic and foreign rating agencies, and (c) the usefulness of financial market indicators for rating banks, among other topics. In the third section, the record of sovereign credit ratings in predicting financial crises and the reaction of financial markets to changes in credit ratings is examined. The final section of the volume emphasizes policy issues now facing regulators and credit rating agencies.
Do Banks Provision For Bad Loans In Good Times
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Author : Michèle Cavallo
language : en
Publisher: World Bank Publications
Release Date : 2001
Do Banks Provision For Bad Loans In Good Times written by Michèle Cavallo and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Bancos categories.
Recent debate about the pro-cyclical effects of bank capital requirements, has ignored the important role that bank loan loss provisions play in the overall framework of minimum capital regulation. It is frequently observed that under-provisioning, due to inadequate assessment of expected credit losses, aggravates the negative effect of minimum capital requirements during recessions, because capital must absorb both expected, and unexpected losses. Moreover, when expected losses are properly reflected in lending rates, but not in provisioning practices, fluctuations in bank earnings magnify true oscillations in bank profitability. The relative agency problems faced by different stakeholders, may help explain the prevailing, and often unsatisfactory institutional arrangements. The authors test their hypotheses with a sample of 1,176 large commercial banks - 372 of them in non-G10 countries - for the period 1988-99. After controlling for different country-specific macroeconomic, and institutional features, they find robust evidence among G10 banks, of a positive association between loan loss provisions, and banks' pre-provision income. Such evidence is not confirmed for non-G10 banks, which on average, provision too little in good times, and are forced to increase provisions in bad times. The econometric evidence shows that the protection of outsiders' claims - the claims of minority shareholders in common law countries, and of fiscal authorities in countries with high public debt - on bank income, has negative effects on the level of bank provisions.
The New Digital Era
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Author : Simon Grima
language : en
Publisher: Emerald Group Publishing
Release Date : 2022-09-16
The New Digital Era written by Simon Grima and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-09-16 with Business & Economics categories.
The New Digital Era’s two volumes vitally generate new information in order to determine the advantages and risks in which areas this digitalization, which has increased with the COVID-19 pandemic.
A Strategy For Resolving Europe S Problem Loans
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Author : Mr. Shekhar Aiyar
language : en
Publisher: International Monetary Fund
Release Date : 2015-09-24
A Strategy For Resolving Europe S Problem Loans written by Mr. Shekhar Aiyar and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-09-24 with Business & Economics categories.
Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.
Foreign Bank Subsidiaries Default Risk During The Global Crisis
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Author : Deniz Anginer
language : en
Publisher: International Monetary Fund
Release Date : 2016-06-08
Foreign Bank Subsidiaries Default Risk During The Global Crisis written by Deniz Anginer and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-06-08 with Business & Economics categories.
This paper examines the association between the default risk of foreign bank subsidiaries in developing countries and their parents during the global financial crisis, with the purpose of determining the size and sign of this correlation and, more importantly, understanding what factors can help insulate affiliates from their parents. We find evidence of a significant and robust positive correlation between parent banks’ and foreign subsidiaries’ default risk. This correlation is lower for subsidiaries that have a higher share of retail deposit funding and that are more independently managed from their parents. Host country bank regulations also influence the extent to which shocks to the parents affect the subsidiaries’ default risk. In particular, the correlation between the default risk of subsidiaries and their parents is lower for subsidiaries operating in countries that impose higher capital, reserve, provisioning, and disclosure requirements, and tougher restrictions on bank activities.
Dynamic Loan Loss Provisioning
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Author : Torsten Wezel
language : en
Publisher: International Monetary Fund
Release Date : 2012-05-01
Dynamic Loan Loss Provisioning written by Torsten Wezel and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-05-01 with Business & Economics categories.
This simulation-based paper investigates the impact of different methods of dynamic provisioning on bank soundness and shows that this increasingly popular macroprudential tool can smooth provisioning costs over the credit cycle and lower banks’ probability of default. In addition, the paper offers an in-depth guide to implementation that addresses pertinent issues related to data requirements, calibration and safeguards as well as accounting, disclosure and tax treatment. It also discusses the interaction of dynamic provisioning with other macroprudential instruments such as countercyclical capital.