Forward looking loan provisions: Credit supply and risk-taking
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- dc.contributor.author Morais, Bernardo
- dc.contributor.author Ormazabal, Gaizka
- dc.contributor.author Peydró, José-Luis
- dc.contributor.author Roa, Mónica
- dc.contributor.author Sarmiento, Miguel
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:09:54Z
- dc.date.available 2024-11-14T10:09:54Z
- dc.date.issued 2020-08-01
- dc.date.modified 2024-11-14T10:07:12Z
- dc.description.abstract We show corporate-level real, financial, and (bank) risk-taking effects associated with calculating loan provisions based on expected-rather than incurred-credit losses. For identification, we exploit unique features of a Colombian reform and supervisory, matched loan-level data. The regulatory change induces a dramatic increase in provisions. Banks tighten all new lending conditions, adversely affecting borrowing-firms, with stronger effects for risky-firms. Moreover, to minimize provisioning, more affected (less-capitalized) banks cut credit supply to risky-firms- SMEs with shorter credit history, less tangible assets or more defaulted loans-but engage in "search-for-yield" within regulatory constraints and increase portfolio concentration, thereby decreasing risk diversification.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1737
- dc.identifier.citation
- dc.identifier.uri http://hdl.handle.net/10230/68638
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1737
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword loan provisions
- dc.subject.keyword ifrs9
- dc.subject.keyword ecl
- dc.subject.keyword corporate real and credit supply effects of accounting
- dc.subject.keyword bank risk-taking
- dc.subject.keyword Finance and Accounting
- dc.title Forward looking loan provisions: Credit supply and risk-taking
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper