Bank Managers' Heterogeneous Decisions on Discretionary Loan Loss Provisions

By Gerald J. Lobo, Dong-Hoon Yang. 2001

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Earnings and capital management and signaling: the use of loan-loss provisions by European banks (2015, methodology): “As to the discretionary factors, Ahmed, Takeda, and Thomas (1999), Moyer (1990), Beatty, Chamberlain, and Magliolo (1995), and Leventis, Dimitropoulos, and Anandarajan (2011) all adopt the ratio of actual regulatory capital before loan-loss reserves to the minimum required regulatory capital to indi”
Cross-country determinants of bank income smoothing by managing loan loss provisions (2008, methodology): “Although managers may employ a range of tools to limit earnings fluctuations, most of the empirical literature in banking has focused on how banks may smooth out their earnings by manipulating their loan-loss provisions, given the significant latitude in determining the amount of this accrual (Green”
Loan Loss Provisions, Earnings Management and Capital Management under IFRS: The Case of EU Commercial Banks (2011, background): ““non-discretionary” components (see Hasan and Wall 2004; Lobo and Yang 2001).”
Bank Loan Loss Provisions Research: A Review (2017, background): “…on the negative relationship between discretionary LLP and Tier 1 capital before LLPs or equity capital (see, Kim and Kross, 1998; Collins, Shackelford, & Wahlen, 1995; Ahmed et al., 1999; Lobo & Yang, 2001; Anandarajan et al., 2007; Leventis et al., 2011; Curcio & Hasan, 2015; Ozili, 2015; etc).”