Corruption in bank lending: The role of timely loan loss recognition

Brian Akins, Yiwei Dou, Tee Yong Ng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

45 Citations (Scopus)


Building on the recent literature on corruption in bank lending, we examine the effect of country-level timely loan loss recognition by banks on lending corruption using a unique World Bank dataset that covers more than 3,600 firms across 44 countries. We find evidence consistent with timely loan loss recognition constraining lending corruption because it increases the likelihood of problem loans being uncovered earlier. In further analysis, we find timely loan loss recognition to be less associated with reduced corruption in countries where there is significant government ownership in the banking system and deposit insurance schemes. This evidence is consistent with timely loan loss recognition being less of a deterrent to lending corruption when banks are less disciplined by their capital providers.
Original languageEnglish
Pages (from-to)454-478
Number of pages25
JournalJournal of Accounting and Economics
Issue number2-3
Publication statusPublished - 1 Apr 2017


  • Banks
  • Corruption
  • Loan loss recognition
  • Timeliness

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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