Loan Loss Provisioning Based on Cyclicality

摘要

We make use of the listed commercial banks' 2004-2012 half-yearly panel data to test cyclical effects of loan loss provisioning. By GMM estimating some factors which influence loan loss provisioning, we find that our commercial banks loan have countercyclical effect owing to the existence of discretionary loan loss provisions. At the meantime, commercial banks have motivations to manage earnings.