JEL Classification: G21, M41
Keywords: Banks, Nonperforming loans, Lending, Accounting discretion
학회소식
[2022년 5차 CAFM2022]Bank Reporting Decisions on Problem Loans: Evidence from Natural Disaster Responses
작성자 : 관리자
조회수 : 1253
게시일 :
2022-12-20
Using natural disasters as shocks on local borrowers’ solvency, we investigate how banks’ post-shock reporting patterns of problem loans are affected by their existing asset quality. We find that local banks with high nonperforming loan ratios tend to report fewer problem loans in their financial statements upon facing natural disasters in the regions. These results are not driven by banks’ real management to downsize their problem loans, such as expanding origination of safer loans and increasing loan charge-off. We conclude that banks’ existing loan quality is an important driver underlying their use of accounting discretion to under-report problem loans.
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