Bank Loan-Loss Provisions: A study of Korean Commercial Banks

Do, Phuong Nhu (2013) Bank Loan-Loss Provisions: A study of Korean Commercial Banks. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This paper studies the bank loan-loss provisioning behaviour of 16 Korean commercial banks over the 2006Q2-2011Q2 period using both bank-specific and macroeconomic variables. Two regression methods: Generalised Least Squares- Random Effects model and the Dynamic Panel Data Arellano-Bond model are applied. The empirical analysis on LLPs of Korean banks in this paper mainly focus on the following issues: 1) whether LLP is influenced by the income smoothing practice; 2) the relationship between LLP practice and the economic cycle; 3) whether Korean banks use provisions to manage their capital given the minimum regulatory capital requirements; 4) whether LLP level in Korean banks are affected by their provision level of the last period. Evidence of income smoothing practice, procyclicality is present but there is no evidence of capital management. The result also suggests Korean banks adjust provision level based on that of the previous year.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 29 Mar 2022 16:08
Last Modified: 29 Mar 2022 16:08
URI: http://eprints.nottingham.ac.uk/id/eprint/26384

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