Credit policy in small Polish banks - is there room for income smoothing?

• Autorzy: Dorota Skała
• Języki publikacji: EN

Abstrakty

EN

We study credit policy in a unique sample of c.360 Polish cooperative banks between 2007-2012. We find evidence for income smoothing through loan loss provisions, indicating that cooperative banks take advantage of higher earnings to make reserves for periods when their profitability might decrease. Similarly to commercial banks, provisions of cooperative banks are procyclical towards the macroeconomic cycle. When regional economic conditions deteriorate, cooperative banks increase their provisioning and this is especially visible when the economic slumps are severe. These results indicate that the different shareholder structure of cooperative banks does not affect managerial incentives for income smoothing. Thus, problems of cyclicality in the cooperative sector should be addressed by local policymakers in the same extent as that of cyclicality in the commercial banking sector.(original abstract)

Słowa kluczowe

PL

Kapitał bankowy; Kapitał finansowy; Banki spółdzielcze

EN

Bank capital; Financial capital; Cooperative banks

• Czasopismo: Roczniki Kolegium Analiz Ekonomicznych / Szkoła Główna Handlowa
• Rocznik: 2014
• Numer: nr 34 Modelowanie danych panelowych : teoria i praktyka : III Ogólnopolska Konferencja
• Strony: 183-196

Twórcy

autor

Dorota Skała

• University of Szczecin

Bibliografia

• Ahmed A.S., Takeda C., Thomas S., Bank loan loss provisions: a reexamination of capital management, earnings management and signalling effects, "Journal of Accounting and Economics" 1999, vol. 28, pp. 1-25.
• Balla E., McKenna A., Dynamic Provisioning: A Countercyclical Tool for Loan Loss Reserves, "Economic Quarterly" 2009, vol. 95(4), pp. 383-418.
• Beatty A., Chamberlain S., Magliolo J., Managing Financial Reports of Commercial Banks: The Influence of Taxes, Regulatory Capital, and Earnings, "Journal of Accounting Research" 1995, vol. 33(2), pp. 231-261.
• Bikker J.A., Metzemakers P.A.J., Bank provisioning behaviour and procyclicality, "Journal of International Financial Markets, Institutions and Money" 2005, vol. 15, pp. 141-157.
• Bornemann S., Kick T., Memmel C., Pfingsten A., Are banks using hidden reserves to beat earnings benchmarks? Evidence from Germany, Deutsche Bundesbank Discussion Paper, Series 2: Banking and Financial Studies, no. 13, 2010.
• Bouvatier V., Lepetit L., Strobel F., Bank income smoothing, ownership concentration and the regulatory environment, "Journal of Banking and Finance" 2014, vol. 41, pp. 253-270.
• Czopur S., Kapitał finansowy banków spółdzielczych, CeDeWu, Warszawa 2012.
• De Lis S., Herrero A., Dynamic provisioning: Some lessons from existing experiences', BBVA Research Working Paper, 2010.
• Fillat J.L., Montoriol-Garriga J., Addressing the pro-cyclicality of capital requirements with a dynamic loan loss provisions system, Federal Reserve Bank of Boston, Quantitative Analysis Unit Working Paper, QAU 10-4, 2010.
• Financial Stability Board, IMF and BIS, Macroprudential Policy Tools and Frameworks, Progress Report to G20, 2011, http://www.imf.org/external/np/g20/ pdf/102711.pdf.
• Financial Stability Forum, Report of the Financial Stability Forum on Addressing Procyclicality in the Financial System, 2009, http://www.financialstabilityboard. org/publications/r_0904a.pdf.
• Fonseca A., Gonzalez F., Cross-country determinants of bank income smoothing by managing loan-loss provisions, "Journal of Banking and Finance" 2008, vol. 32, pp. 217-228.
• Greenawalt M.B., Sinkey J.F., Bank Loan-Loss Provisions and the Income-Smoothing Hypothesis: An Empirical Analysis, 1976-1984, "Journal of Financial Services Research" 1988, vol. 1, pp. 301-318.
• Kanagaretnam K., Lim C.Y., Lobo G.J., Auditor reputation and earnings management: International evidence from the banking industry, "Journal of Banking and Finance" 2010, vol. 34, pp. 2318-2327.
• Laeven L., Majnoni G., Loan loss provisioning and economic slowdowns: too much, too late?, "Journal of Financial Intermediation" 2003, vol. 12(2), pp. 178-197.
• Leuz C., Nanda D., Wysocki P., Earnings management and investor protection: an international comparison, "Journal of Financial Economics" 2003, vol. 69, pp. 505-527.
• Mielnik M., Szambelańczyk J., Ocena efektywności banków spółdzielczych w Polsce w latach 1997-2003, "Bezpieczny Bank" 2006, nr 1, pp. 3-27.
• Perez D., Salas V., Saurina J., Earnings and Capital Management in Alternative Loan Loss Provision Regulatory Regimes, "European Accounting Review" 2008, vol. 17(3), pp. 423-445.
• Quagliariello M., Banks' riskiness over the business cycle: a panel analysis on Italian intermediaries, "Applied Financial Economics" 2007, vol. 17, pp. 119-138.
• Saurina J., Dynamic Provisioning - the Experience of Spain, Crisis Response: Public Policy for the Private Sector, World Bank, no. 7, 2009.
• Skala D., Income Smoothing and Procyclicality of Loan Loss Provisions in Central European Banks, 2013, http://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2426144.
• Szambelańczyk J., Banki spółdzielcze w Polsce w procesach zmian systemowych, Wydawnictwo Akademii Ekonomicznej w Poznaniu, Poznań 2006.
• Szelągowska A., Współczesna bankowość centralna, CeDeWu, Warszawa 2012.