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Loan Loss Provisioning Behavior, Income Smoothing and the Role of Banks' Ownership Structure
2012
Social Science Research Network
We empirically examine whether the way a bank might use loan loss provisions to smooth its income, potentially in order to obscure its risk taking, is in ‡uenced by its ownership structure. Using a panel of European commercial banks, we ...nd evidence of such behavior for banks with a high level of ownership concentration. This behavior is less pronounced in countries with stronger supervisory regimes, but independent of the type of the majority shareholder. Banks with a low level of ownership
doi:10.2139/ssrn.2133345
fatcat:bme2ltdu2ze4hd7pu4dnxd2yza