Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217598 
Authors: 
Year of Publication: 
2016
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 5 [Issue:] 2 [Publisher:] De Gruyter Open [Place:] Warsaw [Year:] 2016 [Pages:] 157-173
Publisher: 
De Gruyter Open, Warsaw
Abstract: 
In this paper we used a panel of Albanian banks for the period 2004-2014 to examine the main determinants of loan loss provisions. In addition, we tested how the latest crisis has affected provisioning behaviour of the banks. We find that loan loss provisions of banks are driven by non-discretionary components and economic fluctuations. Furthermore, we find a positive and significant result between earnings before interest, taxes and provisions and loan loss provisions, thus confirming the income smoothing hypothesis. Our estimated results do not support the capital management and signalling hypotheses. We also find that the global crisis has contributed significantly to the procyclicality of loan loss provisioning in Albania and banks continued to do income smoothing during the crisis.
Subjects: 
Loan loss provisions
Procyclicality
Income Smoothing
Albanian banks
Dynamic GMM.
JEL: 
G21
C33
C36
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

Files in This Item:
File
Size





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