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Loan loss provisioning by Italian banks: Managerial discretion, relationship banking, functional distance and bank risk

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  • Aristei, David
  • Gallo, Manuela

Abstract

This paper investigates the loan loss provisioning behaviour of Italian banks during the period 2006–2013. We examine the main discretionary and non-discretionary determinants of loan loss provisions (LLPs) and explicitly investigate the role of bank's functional distance, geographic diversification and risk.

Suggested Citation

  • Aristei, David & Gallo, Manuela, 2019. "Loan loss provisioning by Italian banks: Managerial discretion, relationship banking, functional distance and bank risk," International Review of Economics & Finance, Elsevier, vol. 60(C), pages 238-256.
    • Handle: RePEc:eee:reveco:v:60:y:2019:i:c:p:238-256
    DOI: 10.1016/j.iref.2018.10.022
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    Cited by:

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    4. Beniamino Pisicoli, 2022. "Banking diversity, financial complexity and resilience to financial shocks: evidence from Italian provinces," International Review of Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 338-402, May.
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    6. Wahyoe Soedarmono & Iman Gunadi & Sudiro Pambudi & Ade Dwi Aryani, 2022. "Bank Loan Loss Provisioning And Procyclicality Revisited: Evidence From Indonesia," Working Papers WP/02/2022, Bank Indonesia.
    7. Albulena Shala & Valentin Toçi & Skender Ahmeti, 2020. "Income smoothing through loan loss provisions in south and Eastern European banks," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 38(2), pages 429-452.

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    More about this item

    Keywords

    Loan loss provisions; Income smoothing; Bank regulation; Functional distance; Earnings volatility; Italian banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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