Economic Loan Loss Provision and Expected Loss

The intention of a loan loss provision is the anticipation of the loan's expected losses by adjusting the book value of the loan. Furthermore, this loan loss provision has to be compared to the expected loss according to Basel II and, in the case of a difference, liable equity has to be adjusted. This however assumes that the loan loss provision and the expected loss are based on a similar economic rationale, which is only valid conditionally in current loan loss provisioning methods according to IFRS. Therefore, differences between loan loss provisions and expected losses should only result from different approaches regarding the parameter estimation within each model and not due to different assumptions regarding the outcome of the model. The provisioning and accounting model developed in this paper overcomes the before-mentioned shortcomings and is consistent with an economic rationale of expected losses. Additionally, this model is based on a close-to-market valuation of the loan that is in favor of the basic idea of IFRS. Suggestions for changes in current accounting and capital requirement rules are provided.

Differences in Internet Usage - Social Inequality and Informal Education

In the public debate the internet is regarded as a central resource for knowledge and information. Associated with this is the idea that everyone is able and even expected to serve himself or herself according to his or her own needs via this medium. Since more and more services are also delivered online the internet seems to allow its users to enjoy specific advantages in dealing with their everyday life. However, using the internet is based on a range of preconditions. New results of empirical and theoretical research indicate the rise of a social divide in this context. Within the internet, different ways of use can be identified alongside social inequalities. Boundaries of the "real life" are mirrored in the virtual space e.g. in terms of forms of communification and spaces for appropriation. These are not only shaped by invidual preferences but particularly by social structures and processes. In the context of the broader debate on education it is stated that formal educational structures are to be completed by arrangements which are structured in informal respectively nonformal ways. Particularly the internet is suggested to play an important role in this respect. However, the phenomenon of digital inequality points to limitations consolidated by effects of economic, social, and cultural ressources: Economical resources affect opportunities of access, priorities of everyday life shape respective intentions of internet use, social relationships have an impact on the support structures available and ways of appropriation reproduce a specific understanding of informal education ("informelle Bildung"). This produces an early stratification of opportunities especially for the subsequent generation and may lead to extensive inequalities regarding the distribution of advantages in terms of education. Thus the capacity of the virtual space in terms of participatory opportunities and democratic potentials raises concerns of major relevance with respect to social and educational policy. From the perspective of different disciplines involved in these issues it is essential to clarify this question in an empirical as well as in a theoretical way and to make it utilizable for a future-orientied practice. This article discusses central questions regarding young people's internet use and its implications for informal education and social service delivery on the basis of empirical findings. It introduces a methodological approach for this particular perspective and illustrates that the phenomena of digital divide and digital inequality are as much created by social processes as by technical issues.