Loan Loss Provisioning Policy Reform and Forward-looking Human Capital Demand
Loan loss provisions carry and transmit credit risk information,and their recognition timeliness and adequacy determine the quality of information disclosure by commercial banks.As a major forward-looking reform of the banking sector's loan loss provisioning policy,the expected credit loss(ECL)model under the new financial instrument accounting standard includes future credit risks within the scope of loan loss provisioning to address the problem of information asymmetry,posing new challenges to the supporting construction and management of bank human capital.Do commercial banks actively allocate corresponding human capital for the implementation of the ECL model?How does the investment in relevant human capital affect the ECL model's role in mitigating information asymmetry?Answering these questions is of practical significance for the evaluation of the ECL model effectiveness,further improvement of relevant accounting standards,and an advance in financial regulatory governance work.Based on the quasi-natural experiment of Chinese commercial banks'staggered adoption of the new financial instrument accounting standard,this study uses online recruitment data from 2015 to 2020 and finds that implementing the ECL model prompts banks to increase their forward-looking human capital demand.Mechanism tests show that the adoption of the ECL model increases forward-looking human capital demand for information technology and risk compliance departments by improving bank information production and risk management.Furthermore,the effect is concentrated in positions with higher educational and work experience requirements,indicating a synergistic rather than substitutive effect between individual forward-looking traits and other labor skills.Heterogeneity tests reveal that banks'internal and external motivations in responding to the ECL-driven challenges by means of forward-looking job postings,local talent supply,and organizational nature play a moderating role in the above effect.Consequence tests show that post-ECL investment in forward-looking human capital facilitates banks to increase their loan loss provisioning timeliness and credit asset quality.This study provides the first evidence on the economic consequences of the ECL model adoption from the perspective of human capital management,a research framework on how the implementation of accounting standards leads to adjustments in human capital demand by changing business processes,and also practical implications for accounting standards revision and banking supervision.In addition,this study expands the research scenarios related to the human capital theory and individual-organization matching theory,and contributes to the acquisition and economic consequences of employees'forward-looking traits.Finally,this study plays a supplemental role for the classic theoretical framework of information asymmetry,and sheds light on factors that affect the effectiveness of accounting standard application in mitigating information asymmetry.
commercial banksexpected credit loss modelforward-lookinghuman capitalbank recruitment
NETL
NSTL
万方数据
