Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108802
Authors: 
Caporale, Guglielmo Maria
Alessi, Matteo
Colli, Stefano Di
Lopez, Juan Sergio
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5253
Abstract: 
This paper uses data from a panel of more than 400 Italian banks for the period 2001 - 2012 to examine the main determinants of loan loss provision (LLP), which are classified as either discretionary (income smoothing, capital management, signalling) or non-discretionary (related to the business cycle). The results suggest that LLP in Italian banks is driven mainly by non-discretionary components, especially during the recession of 2008-2012, and is consistent with a countercyclical behavior of LLP. Further, it is generally less pro cyclical (although not during the recent economic crisis) in the case of local banks: since their loans are more collateralised, their behaviour is more strongly affected by supervisory activity, their initial coverage ratio being lower than for other banks.
Subjects: 
loan loss provision
bank lending
financial system cyclicality
JEL: 
G21
G28
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.