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2021 | 69 | 1 | 3 – 17
Article title

BANK PROVISIONING BEHAVIOUR, PRO-CYCLICALITY AND CAPITAL MANAGEMENT IN SOUTH-EASTERN EUROPE

Content
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EN
Abstracts
EN
Regulators and policymakers pay an increasing attention to the possible pro-cyclical nature of banks’ behaviour in provisioning. Loan-loss provisioning practices of banks are perceived as one of the sources of this pro-cyclicality. The main objective of this study is to provide the evidence on pro-cyclical behaviour and capital management of banks through loan-loss provisions in South-Eastern European countries for the period 2004 – 2015. Our results show that loan-loss provisions of banks are pro-cyclical; however, there is no evidence to indicate a relationship between loan-loss provisions and capital management. The findings suggest that a dynamic provisioning system would be beneficial if it is implemented in South-Eastern Europe. The results also show empirical evidence that loan-loss provisions are not used for income smoothing in banks in South- -Eastern Europe.
Contributors
  • University of Prishtina “Hasan Prishtina”, Faculty of Economics, 10000 Prishtine, Republic of Kosovo
References
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Publication order reference
YADDA identifier
bwmeta1.element.cejsh-0f59c989-f922-46ed-9ddc-7e06e81cf911
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