Title: Loan Loss Provision, Bank's Lending Behavior and Business Cycle——Evidence from Different Types of China's Commercial Banks
Abstract:Effects of loan loss provision on Bank's lending behavior remain a major concern for policy maker in order to strength bank stability. A sample of 107 different types of China's commercial banks over ...Effects of loan loss provision on Bank's lending behavior remain a major concern for policy maker in order to strength bank stability. A sample of 107 different types of China's commercial banks over the 2003- 2013 period is used to identify the loan provisioning characteristics, as well as the impact of loan loss provision on credit growth in different stages of business cycle. Our results indicate the following findings:(1)The loan loss provision management is countercyclical;(2)The impact of loan loss provision on lending behavior in both Big fiveand rural commercial banks are counter- cyclical, while in joint- equity banks and city commercial banks are procyclical;(3)The cyclical effects from loan loss provision to bank's lending is heterogeneous at different periods of business cycle.Read More
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
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