 The impact of banking regulations and accounting standards on estimating discretionary loan loss provisionsAshish Pandey, Abhinava Tripathi and Kousik Guhathakurta Finance Research Letters, 2022, vol. 44, issue C Abstract: Loan loss provisions (LLP) are relatively large accruals for commercial banks. The discretionary nature of LLP makes them particularly useful in examining the impact of regulations on managerial behaviour. The accounting standards in emerging countries are often rule-based instead of the principle-based approach adopted in developed countries. We propose and compare a new specification incorporating the rule-based approach with nine widely employed LLP specifications used in the literature. We show empirically, employing a range of model selection criteria, that our proposed specification is more suitable for understanding the information content of LLP in emerging countries. In this study, all the specifications are compared and examined using data from India, a large and important emerging economy. Keywords: Loan loss provision; Discretionary provision; Nonperforming asset; Accruals; Managerial behaviour; Incurred-loss approach (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001495 DOI: 10.1016/j.frl.2021.102068 Access Statistics for this article Finance Research Letters is currently edited by R. Gençay More articles in Finance Research Letters from Elsevier |
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