Bank loan loss provisioning during election years: cross-country evidence

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: I examine bank loan loss provisioning behaviour during election years - focusing on the effect of elections on banking sector loan loss provisioning. The findings reveal that the banking sectors in developed countries have higher loan loss provisions in election years. Income smoothing is present in election years which supports the income smoothing hypothesis. Also, banking sectors with high capital levels have higher loan loss provisions. Although there were no significant differences in bank loan loss provisioning during election years across the four bloc, the EU banking sectors and the banking sectors of BIS member-countries generally have higher loan loss provisions while the non-EU banking sectors and the banking sectors of the G7 member-countries generally have fewer loan loss provisions.

Keywords: loan loss provisions; income smoothing; election; banks; credit risk, nonperforming loans, institutional factors, corruption, (search for similar items in EconPapers)
JEL-codes: G21 G28 M4 M42 M48 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://mpra.ub.uni-muenchen.de/96639/1/MPRA_paper_96639.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/103196/1/MPRA_paper_103196.pdf revised version (application/pdf)

Related works:
Journal Article: Bank loan loss provisioning during election years: cross-country evidence (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96639

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