Effects of loan loss provisions on growth in bank lending : some international comparisons
Résumé
A dynamic provisioning system is one of the instruments that regulators could use for introducing counter-cyclicality into prudential regulation. The potential e¤ective-ness of such instrument depends on how far actual provisioning practices exacerbate growth in bank lending. We therefore investigate the e¤ects of loan loss provisions on growth in bank lending, making a di¤erence between non discretionary and dis-cretionary loan loss provisions. International comparisons are made between …ve ge-ographical areas : Europe, Japan, the United-States, Central & South American and South & East Asia. Except for Japanese banks, we …nd a negative and signi…cant ef-fect of non discretionary loan loss provisions on growth in bank lending. This common feature lead us to conclude that banking regulators could reach a consensus concerning the bene…cial aspects of a dynamic provisioning system.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)
Loading...