Several studies have addressed, with conflicting results, the issue of procyclical effects of loan loss provisions in … the past. More recently, the weak performance of incurred loss models in the financial crisis has given rise to a new … expected loss model in IFRS 9. This study contributes to the extant literature by separately analyzing the cyclical effects of …

This paper provides early evidence on the effect of global regulation mandating a switch from loan loss provisioning … disclosures on the first-time impact of the accounting change; we find that a higher impact on loan loss allowances elicits lower …

application of the model, we construct a proxy for expected lifetime losses and measure expected loss overhang (Bushman and … loss overhang distorting banks' real decisions. The model serves as a useful benchmark to evaluate the timeliness of …

different impairment rules and their potential effect on bank income and lending, a migration model simulates the “incurred loss …”, the “lifetime loss” and “three bucket” approaches now under consideration by standard setters. The last two “expected loss …

- abrupt switches between high- and low-loss phases - from a risk-management perspective. As uncertainty about phase switches … increases, expected losses decouple from unexpected losses, which reflect a high percentile of the loss distribution. Banks that … ignore this decoupling have shortfalls of loss-absorbing resources, which is more detrimental if the portfolio is more …

This paper examines the real effects of banks switching to an expected credit loss (ECL) framework under IFRS 9. I …

capital threshold from 4 to 6 percent. It also emphasizes the need to improve timeliness of loan loss provisions. Using a … sample of European banks, we examine the impact of this regulation on banks’ discretionary loan loss provisioning behavior … discretionary loan loss provisions (DLLPs) for capital management purposes and a corresponding reduction in the use of these …

This paper examines banks' disclosures and loss recognition in the financial crisis and identifies several core issues …' reporting incentives played a key role, which has important implications for bank supervision and the new expected loss model …

Academic research on loan loss provisioning and the earlier incurred credit losses (ICL) model has a long tradition in … extend the research field with an empirical contribution to the recognition of Loan Loss Provisions (LLPs) based on the … Expected Credit Loss model (ECL). By using a Difference-in-Differences research design, this paper aims to investigate the …

higher valuation of discretionary loan loss provisions when the board was independent and a lower valuation of discretionary … loan loss provisions when the governance committee and the compensation committee were fully independent. In contrast, post … loss provisions when the compensation committee were fully independent. We contribute to prior literature on corporate …