Loan loss provisioning in banking sectors of Central Europe: Do local banks really behave in a procyclical way?

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F26138077%3A_____%2F14%3A%230000693" target="_blank" >RIV/26138077:_____/14:#0000693 - isvavai.cz</a>
Result on the web
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DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Loan loss provisioning in banking sectors of Central Europe: Do local banks really behave in a procyclical way?
Original language description
This paper sets out to discuss the extent of procyclicality in Central European banks´ lending behaviour and how much the regulatory and accounting framework may contribute to it. The main focus is the behaviour of banks regarding provisioning against impaired financial assets. To examine the potential procyclical behaviour of banks, we applied the model showing the banks´ dependence on the business cycle when provisioning (the left-hand side of the equation) and proxies for the business cycle (the right-hand side of the equation). The variables in the equation can be divided into (i) macroeconomic ones ů growth rate of real GDP per capita and unemployment gap, and (ii) bank-specific variables ? the ratio of loan loss provisions to average total assets, the real loan growth, the ratio of total loans to average total assets, pre-tax earnings ratio, and the ratio of equity capital to average total assets. We employed panel data models with fixed effects.
Czech name
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Czech description
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Project
<a href="/en/project/GA13-08549S" target="_blank" >GA13-08549S: Post-crisis regulation of banks and its impact on economic activity in a small export-oriented economy</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2014
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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