Research On Dynamic Characteristics Of Loan Loss Preparation In Chinese Commercial Banks

As an important part of the financial industry,banks have always played an important role in the development of the national economy.Loan Loss Provision(LLP)is a reserve fund drawn by commercial banks to withstand the risks arising from nonperforming loans to compensate for loans that cannot be recovered at maturity.The loan loss preparation is of great significance to the bank's sound operation.The lack of attention in its management will cause many problems.In the 2008 financial crisis,there were more than 400 banks in the United States that collapsed due to the loan crisis.The World Bank organization has re-examined and paid more attention to the bank.Accrual strategy for loan loss provision.Many scholars and banking experts at home and abroad have done a lot of research on this,but there is no consensus on specific characteristics.This paper studies the dynamic characteristics of loan loss provision,and aims to provide banks with data support for risk control and provide management advice for bank managers and market regulators.Based on the research on the development history,status quo and characteristics of China's banking loan loss provisions,this paper selects 41 listed commercial banks based on the existing policy and from the policy background of China,using Osiris,Orbis Bank Focus and other databases.More than 20 indicators from 2011 to 2017,study the close relationship between commercial bank loan loss provision and bank efficiency,earnings management,capital management and socio-economic cycle.First,a descriptive statistical analysis of the current situation of non-performing loans in the banking industry is carried out.Then establish a stochastic frontier model with reference to the most effective factors of input cost and business output,and calculate the efficiency front of the bank through employee cost,customer savings,fixed assets and loan sum,profitable assets,and management income,and obtain bank efficiency factors.Finally,a dynamic panel model is established.Through the construction of two dynamic panel models and instrumental variables,indicators such as pre-tax income,total asset reserve,capital ratio,GDP growth rate,and bank size are selected to explore whether the bank uses loan loss provisions as its The leverage of operating objectives,the relationship between bank efficiency and loan loss provisions,and the impact of the socio-economic cycle on the provision for loan losses.Based on the above research,the paper draws the following four conclusions: First,China's bank loan loss provision has a surplus management feature,indicating that the banking industry does use loan loss provisions as a tool to balance its income;second,it makes capital through loan loss provisions.The characteristics of management are not significant;the third is that the provision for loan loss provision has a procyclicality,while the banking industry has less accrual when the economy is going up;the fourth is that bank efficiency is negatively correlated with loan loss provision,and when efficiency declines Bank managers tend to increase their loan loss provisions.In addition,the paper also found that in terms of bank efficiency,the best performance is the national joint-stock commercial banks,which are close to the level of state-owned banks and city commercial banks.Based on the above conclusions,combined with the actual situation,give advice on the management of loan loss provisions: strengthen commercial bank supervision and encourage self-management;further require banks to improve the quality of their information disclosure,ensure the practicability and transparency of information;improve dynamic provisioning Institutions to strengthen risk prevention and control.