Τραπεζική - Ζημιές απομειώσεως
Banking - Loan loss provisions
KeywordsΤραπεζική ; Ζημιές απομειώσεως ; Μακροοικονομικές μεταβλητές ; Ομαλοποίηση κερδών ; Προβλεπτική συμπεριφορά
Experiencing the global financial crisis many countries had to impose stricter regulations and apply measures of salvation of their banking sector. Although, there were countries such Australia and Canada, that were example of industrialized countries which did not face bank crisis. Through the existing literature we have concluded that a mechanism that banks are using as instrument in order to manipulate their financial statements, is loans loss provisions. The purpose of this study, through the research of two countries with banking stability, was to detect the impact of macroeconomics variables in the formation of loans loss provisions. The data of the study were selected from 14 banks of Australia and Canada with continuous operation from 2000 till 2016. We end up to the conclusion that these banks conduct income smoothing through loans loss provisions, espouse procyclical behaviour in their decisions, which is smaller in comparison with the pre-crisis period, while evaluating the estimations of macroeconomics conditions, they try to espouse a more forward looking (countercyclical) behaviour. As we started this study, we had assumed that the results would prove the significance of microeconomics factors. Finally, the results were different than expected as from the macro economical factors, only unemployment was found to have an impact and this in a lesser extent than expected. Possible cause of this was the fact, that we studied two countries with stable banking sector, where the management of these banks, adopted long term strategies by taking protective measures in case of a possible recession. Hereby they are prepared for the possibility of deterioration of economic conditions that is the reason that observed shift to countercyclical behaviour, but not intense.