Term:
Loan-loss provisions
Definition:
These are net allowances that deposit-takers make against bad or impaired loans, based on their judgment as to the likelihood of losses occurring. Loan-loss provisioning affects both income and, depending on the type of provisions made, capital.
Domain:
Finance
Source:
IMF, 2004, Compilation Guide on Financial Soundness Indicators, IMF, Washington DC, Appendix VII, Glossary