Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries
This report reviews loan classification and provisioning practices in a broad sample of countries that differ in size, location and level of financial development. The survey conducted for the report compares the regulatory approaches adopted by in...
| Main Authors: | , |
|---|---|
| Format: | Publication |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2013
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2375952/bank-loan-classification-provisioning-practices-selected-developed-emerging-countries http://hdl.handle.net/10986/15157 |
| id |
okr-10986-15157 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-151572021-04-23T14:03:11Z Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries Laurin, Alain Majnoni, Giovanni Laurin, Alain Majnoni, Giovanni BANKS & BANKING EMERGING ECONOMIES PROVISIONING RISK MANAGEMENT EXTERNAL AUDITORS FINANCIAL SYSTEMS LOANS GOVERNMENT GUARANTY LOAN GUARANTEES BEST PRACTICES REGULATORY FRAMEWORK REGULATORY CONTROL ACCOUNTING ASSET CLASSIFICATION AUDITING BANK FAILURES BANK SUPERVISION BANKING SYSTEM BANKS BANQUE DE FRANCE BORROWER CAPITAL BASE CAPITAL REQUIREMENTS CENTRAL BANK COLLATERAL CREDIT RISK DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EMERGING ECONOMIES ENFORCEMENT POWERS EXTERNAL AUDITORS FINANCIAL ASSETS FINANCIAL INFORMATION FINANCIAL PERFORMANCE FINANCIAL RATIOS FINANCIAL STABILITY FINANCIAL SYSTEMS GUARANTOR GUIDELINES IMPAIRED ASSETS INFRASTRUCTURE LOANS INTERNATIONAL ACCOUNTING STANDARDS LEGAL INFRASTRUCTURE LEGAL SYSTEMS LIQUIDITY LOAN LOAN ACCOUNTING LOAN CLASSIFICATION LOAN GUARANTEES LOAN LOSS PROVISIONS LOAN LOSSES LOAN PORTFOLIOS LOAN REVIEWS MARKET DISCIPLINE MARKET VALUE MORTGAGES NET REALIZABLE VALUE NONPERFORMING LOANS PENALTIES PROBABILITY OF DEFAULT PRUDENTIAL REGULATION REAL ESTATE LOANS REGULATORY APPROACHES RISK MANAGEMENT SECURITIES SHAREHOLDERS SOLVENCY This report reviews loan classification and provisioning practices in a broad sample of countries that differ in size, location and level of financial development. The survey conducted for the report compares the regulatory approaches adopted by industrial and emerging economies, and is intended to complement other sources of information that focus exclusively on either industrial or developing countries. It covers classification of individual and multiple loans, treatment of guarantees, collateral and restructured loans, bank loans review processes, loan loss provisioning, tax treatment of loan loss provisions, disclosure standards, and external auditors' role. Differences in provisioning and classification approaches have often made difficult a comparison of bank and banking system weaknesses across regulatory regimes. Poor classification and provisioning practices have led to solvency ratios that gave a false sense of security, as occurred when seemingly adequately capitalized financial systems failed in the 1990s. Successful regulatory harmonization therefore requires a set of minimum standards for loan classification that is grounded in sound risk management practices, but that is also sufficiently general to recognize differences in national economic and legal environment. The evidence this report provides is intended to contribute to this difficult task. 2013-08-19T16:07:32Z 2013-08-19T16:07:32Z 2003 http://documents.worldbank.org/curated/en/2003/03/2375952/bank-loan-classification-provisioning-practices-selected-developed-emerging-countries 0-8213-5397-7 http://hdl.handle.net/10986/15157 English en_US World Bank Working Paper;No. 1 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research :: Publication Publications & Research :: Publication |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BANKS & BANKING EMERGING ECONOMIES PROVISIONING RISK MANAGEMENT EXTERNAL AUDITORS FINANCIAL SYSTEMS LOANS GOVERNMENT GUARANTY LOAN GUARANTEES BEST PRACTICES REGULATORY FRAMEWORK REGULATORY CONTROL ACCOUNTING ASSET CLASSIFICATION AUDITING BANK FAILURES BANK SUPERVISION BANKING SYSTEM BANKS BANQUE DE FRANCE BORROWER CAPITAL BASE CAPITAL REQUIREMENTS CENTRAL BANK COLLATERAL CREDIT RISK DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EMERGING ECONOMIES ENFORCEMENT POWERS EXTERNAL AUDITORS FINANCIAL ASSETS FINANCIAL INFORMATION FINANCIAL PERFORMANCE FINANCIAL RATIOS FINANCIAL STABILITY FINANCIAL SYSTEMS GUARANTOR GUIDELINES IMPAIRED ASSETS INFRASTRUCTURE LOANS INTERNATIONAL ACCOUNTING STANDARDS LEGAL INFRASTRUCTURE LEGAL SYSTEMS LIQUIDITY LOAN LOAN ACCOUNTING LOAN CLASSIFICATION LOAN GUARANTEES LOAN LOSS PROVISIONS LOAN LOSSES LOAN PORTFOLIOS LOAN REVIEWS MARKET DISCIPLINE MARKET VALUE MORTGAGES NET REALIZABLE VALUE NONPERFORMING LOANS PENALTIES PROBABILITY OF DEFAULT PRUDENTIAL REGULATION REAL ESTATE LOANS REGULATORY APPROACHES RISK MANAGEMENT SECURITIES SHAREHOLDERS SOLVENCY |
| spellingShingle |
BANKS & BANKING EMERGING ECONOMIES PROVISIONING RISK MANAGEMENT EXTERNAL AUDITORS FINANCIAL SYSTEMS LOANS GOVERNMENT GUARANTY LOAN GUARANTEES BEST PRACTICES REGULATORY FRAMEWORK REGULATORY CONTROL ACCOUNTING ASSET CLASSIFICATION AUDITING BANK FAILURES BANK SUPERVISION BANKING SYSTEM BANKS BANQUE DE FRANCE BORROWER CAPITAL BASE CAPITAL REQUIREMENTS CENTRAL BANK COLLATERAL CREDIT RISK DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EMERGING ECONOMIES ENFORCEMENT POWERS EXTERNAL AUDITORS FINANCIAL ASSETS FINANCIAL INFORMATION FINANCIAL PERFORMANCE FINANCIAL RATIOS FINANCIAL STABILITY FINANCIAL SYSTEMS GUARANTOR GUIDELINES IMPAIRED ASSETS INFRASTRUCTURE LOANS INTERNATIONAL ACCOUNTING STANDARDS LEGAL INFRASTRUCTURE LEGAL SYSTEMS LIQUIDITY LOAN LOAN ACCOUNTING LOAN CLASSIFICATION LOAN GUARANTEES LOAN LOSS PROVISIONS LOAN LOSSES LOAN PORTFOLIOS LOAN REVIEWS MARKET DISCIPLINE MARKET VALUE MORTGAGES NET REALIZABLE VALUE NONPERFORMING LOANS PENALTIES PROBABILITY OF DEFAULT PRUDENTIAL REGULATION REAL ESTATE LOANS REGULATORY APPROACHES RISK MANAGEMENT SECURITIES SHAREHOLDERS SOLVENCY Laurin, Alain Majnoni, Giovanni Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| relation |
World Bank Working Paper;No. 1 |
| description |
This report reviews loan classification
and provisioning practices in a broad sample of countries
that differ in size, location and level of financial
development. The survey conducted for the report compares
the regulatory approaches adopted by industrial and emerging
economies, and is intended to complement other sources of
information that focus exclusively on either industrial or
developing countries. It covers classification of individual
and multiple loans, treatment of guarantees, collateral and
restructured loans, bank loans review processes, loan loss
provisioning, tax treatment of loan loss provisions,
disclosure standards, and external auditors' role.
Differences in provisioning and classification approaches
have often made difficult a comparison of bank and banking
system weaknesses across regulatory regimes. Poor
classification and provisioning practices have led to
solvency ratios that gave a false sense of security, as
occurred when seemingly adequately capitalized financial
systems failed in the 1990s. Successful regulatory
harmonization therefore requires a set of minimum standards
for loan classification that is grounded in sound risk
management practices, but that is also sufficiently general
to recognize differences in national economic and legal
environment. The evidence this report provides is intended
to contribute to this difficult task. |
| author2 |
Laurin, Alain |
| author_facet |
Laurin, Alain Laurin, Alain Majnoni, Giovanni |
| format |
Publications & Research :: Publication |
| author |
Laurin, Alain Majnoni, Giovanni |
| author_sort |
Laurin, Alain |
| title |
Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| title_short |
Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| title_full |
Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| title_fullStr |
Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| title_full_unstemmed |
Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries |
| title_sort |
bank loan classification and provisioning practices in selected developed and emerging countries |
| publisher |
Washington, DC: World Bank |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2003/03/2375952/bank-loan-classification-provisioning-practices-selected-developed-emerging-countries http://hdl.handle.net/10986/15157 |
| _version_ |
1764425688222269440 |