Munich Personal RePEc Archive

Is Bank Supervision Effective? Evidence from the Allowance for Loan and Lease Losses

Yang, Ling (2017): Is Bank Supervision Effective? Evidence from the Allowance for Loan and Lease Losses.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_78177.pdf

Download (824kB) | Preview

Abstract

I investigate whether bank supervision is effective in enforcing written rules on the estimations of the allowance for loan and lease losses (ALLL) consistently between public and private banks, which have different intensity of incentives to misreport the ALLL. Results suggest that bank supervision of the ALLL estimations was effective between 2002 and 2012, but has become lax recently. State-chartered public banks underestimated the ALLL by about 13% annually between 2013 and 2015. Bank regulators are willing to cater to banks’ private interests when the economic environment is good and the regulatory emphasis is weak, but not during the crisis.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.