Abstract
The article mainly analyzes the deposit insurance system in our country promulgated after the provision for the impact of bank loan loss provisions. Empirical study found that the deposit insurance system in our country was promulgated in 2015, the bank’s loan loss provisions increased, among them, the big bank loan loss provisions significantly increased. After separating the manipulated loan loss provisions, we found that the manipulated loan loss provisions increased. Further study found that, following the promulgation of the deposit insurance system, managers in commercial bank weakened the motive of income smoothing, but the bank’s capital management behavior does not.
Highlights
Deposit insurance system is a system for protecting depositors
If bank loan loss provisions in deposit insurance system are promulgated after the increase, the increase will not be the same as in the past, which was due to the motive of income smoothing and capital management
On the basis of this paper proposed a third hypothesis: H3: Following the promulgation of the deposit insurance system, banks decrease the motivation of income smoothing by using loan loss provisions
Summary
Deposit insurance system is a system for protecting depositors. Most of the scholars researched the relationship between deposit insurance system and the moral risk, interest rate marketization and the aspects of bank run, and discussed the necessity and feasibility of the system in our country promulgated and enacted after the impact of the banking industry in China. If bank loan loss provisions in deposit insurance system are promulgated after the increase, the increase will not be the same as in the past, which was due to the motive of income smoothing and capital management. Contribution of this paper is mainly manifested in the following aspects: 1) from the angle of view of the deposit insurance system in our country promulgated by empirical analysis inspection system to our country bank loan provisions issued by the impact of provision, enriched the deposit insurance system and loan loss provisions research from two aspects of literature; 2) past research has shown that bank loan scale is not a factor for loan loss provisions of the contact, but this article found that in the influence of the system, the bank scale is one of the factors that affect the number of loan loss provisions; 3) in this paper, we analyze the motive of income smoothing and capital management after the system settled, which have a significance for strengthening our country commercial bank compliance regulation, better guarantee of the interests of the depositors and decreasing commercial banks operating risk.
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