Benford’s law and Chinese banks’ non-performing loans
No 25/2019, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition
Benford’s law states that the leading significant digits in real-world data sets, provided the data span several orders of magnitude, are not normally uniformly distributed. Deviations from this law may indicate human intervention, even fraud. The data on Chinese banks’ non-performing loans has sometimes deviated from Benford’s law. Up to 2012, the frequency of ones as leading significant digits was lower than predicted by Benford’s law. Surprisingly, the number of ones well exceeded the expected level for large and government-owned banks during 2015–2018.
JEL-codes: C46 G21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bof:bofitp:2019_025
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