Research On The Difference Of Loan Loss Provision Level Of Commercial Banks In China

At present,China's economy is facing downside risks,the international trade situation is complex and changeable,and the economic prospects are full of uncertainty.Because of its special status,the banking industry is facing stricter regulatory requirements under the background of de-leveraging.These changes have brought more uncertainty to the loan assets of banks,and the risks faced are also increasing.The purpose of loan loss provision is to guard against future risks and losses of loan assets,which is of great significance to the sound operation of banks and the smooth operation of economy.However,due to the subjectivity and maneuverability of loan loss provision,banks consider other factors when making loan loss provisions.By adjusting the level of loan loss provision,banks expect to achieve different regulatory requirements and operational objectives.It is particularly necessary to study the influencing factors of loan loss provision level because of the adjusted financial information poor at reflecting the bank's operating performance,which is not conducive to investors'decision-making and market supervision by regulatory departments.On the basis of reviewing the literature on the impact of earnings management,capital management,signaling motivation and pro-cyclicality on loan loss provision level at home and abroad,this paper,from the perspective of banks themselves,studies the effect of bank listing and asset size on loan loss provision of different types of banks,affected bv earnings management,capital management,signaling transmission and pro-cyclicality.Then it analyses the theoretical basis of the loan loss provision system and reviews its evolution process from the perspective of the system.On this basis,this paper assumes the larger assets listed banks and the banks' with,the stronger the earnings management,capital management and signal transmission motivation existing in loan loss provision level,and the stronger the pro-cyclicality is.This paper chooses the annual financial data of some commercial banks from 2007 to 2016 as the research sample for empirical research and correlation analysis,multiple regression analysis and robustness test were carried out using Stata 15.0 measurement software after building the model and defining variables,.Through empirical analysis,it is found that listed banks have stronger motivation for earnings management and capital management,and their pro-cyclicality is stronger.Because of the different asset sizes,banks have different performance in the factors affecting the level of loan loss provision.The banks with medium asset sizes perform more prominently in earnings management and capital management,and the pro-cyclicality increases with the expansion of asset sizes.Increased earnings management,signaling motivation and pro-cyclicality exist in the banking sector as a whole while capital management motivation is not significant.Therefore,this paper puts forward three suggestions:strengthening information disclosure,implementing classified supervision and improving the dynamic reserve system.