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Earnings versus capital ratios management: role of bank types and SFAS 114

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  • Fatima Alali
  • Bikki Jaggi

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  • Fatima Alali & Bikki Jaggi, 2011. "Earnings versus capital ratios management: role of bank types and SFAS 114," Review of Quantitative Finance and Accounting, Springer, vol. 36(1), pages 105-132, January.
    • Handle: RePEc:kap:rqfnac:v:36:y:2011:i:1:p:105-132
    DOI: 10.1007/s11156-010-0173-4
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    References listed on IDEAS

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    6. Grammatikos, Theoharry & Saunders, Anthony, 1990. "Additions to bank loan-loss reserves : Good news or bad news?," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 289-304, March.
    7. Timothy W. Koch & Larry D. Wall, 2000. "Bank loan-loss accounting: a review of theoretical and empirical evidence," Economic Review, Federal Reserve Bank of Atlanta, vol. 85(Q2), pages 1-20.
    8. Yukihiro Yasuda & Shin'ya Okuda & Masaru Konishi, 2004. "The Relationship Between Bank Risk and Earnings Management: Evidence from Japan," Review of Quantitative Finance and Accounting, Springer, vol. 22(3), pages 233-248, May.
    9. Shrieves, Ronald E. & Dahl, Drew, 2003. "Discretionary accounting and the behavior of Japanese banks under financial duress," Journal of Banking & Finance, Elsevier, vol. 27(7), pages 1219-1243, July.
    10. Ahmed, Anwer S. & Takeda, Carolyn & Thomas, Shawn, 1999. "Bank loan loss provisions: a reexamination of capital management, earnings management and signaling effects," Journal of Accounting and Economics, Elsevier, vol. 28(1), pages 1-25, November.
    11. Dothan, Uri & Williams, Joseph, 1980. "Banks, bankruptcy, and public regulation," Journal of Banking & Finance, Elsevier, vol. 4(1), pages 65-87, March.
    12. Jaggi, Bikki & Zhao, Ronald, 2002. "Information Content of Earnings and Earnings Components of Commercial Banks: Impact of SFAS No. 115," Review of Quantitative Finance and Accounting, Springer, vol. 18(4), pages 405-421, June.
    13. Niswander, Frederick & Swanson, Edward P., 2000. "Loan, security, and dividend choices by individual (unconsolidated) public and private commercial banks," Journal of Accounting and Public Policy, Elsevier, vol. 19(3), pages 201-235.
    14. Keeley, Michael C. & Furlong, Frederick T., 1990. "A reexamination of mean-variance analysis of bank capital regulation," Journal of Banking & Finance, Elsevier, vol. 14(1), pages 69-84, March.
    15. Dahl, Drew & Shrieves, Ronald E., 1991. "The impact of regulation on bank equity infusions," Journal of Banking & Finance, Elsevier, vol. 15(2), pages 467-468, April.
    16. Gennotte, Gerard & Pyle, David, 1991. "Capital controls and bank risk," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 805-824, September.
    17. Craig Furfine, 2001. "Bank Portfolio Allocation: The Impact of Capital Requirements, Regulatory Monitoring, and Economic Conditions," Journal of Financial Services Research, Springer;Western Finance Association, vol. 20(1), pages 33-56, September.
    18. Ronald Zhao & Yihong He, 2004. "The Impact of SFAS No. 114 on the Linear Information Dynamic for Commercial Banks," Review of Quantitative Finance and Accounting, Springer, vol. 23(4), pages 313-328, December.
    19. Beatty, A & Chamberlain, Sl & Magliolo, J, 1995. "Managing Financial Reports Of Commercial-Banks - The Influence Of Taxes, Regulatory Capital, And Earnings," Journal of Accounting Research, Wiley Blackwell, vol. 33(2), pages 231-261.
    20. Avery, Robert B & Belton, Terrence M & Goldberg, Michael A, 1988. "Market Discipline in Regulating Bank Risk: New Evidence from the Capital Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(4), pages 597-610, November.
    21. Wikil Kwak & Ho-Young Lee & Susan W. Eldridge, 2009. "Earnings Management by Japanese Bank Managers Using Discretionary Loan Loss Provisions," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 1-26.
    22. Hagerman, Robert L. & Zmijewski, Mark E., 1979. "Some economic determinants of accounting policy choice," Journal of Accounting and Economics, Elsevier, vol. 1(2), pages 141-161, August.
    23. Kanagaretnam, Kiridaran & Lobo, Gerald J & Mathieu, Robert, 2003. "Managerial Incentives for Income Smoothing through Bank Loan Loss Provisions," Review of Quantitative Finance and Accounting, Springer, vol. 20(1), pages 63-80, January.
    24. Charoenwong, Charlie & Jiraporn, Pornsit, 2009. "Earnings management to exceed thresholds: Evidence from Singapore and Thailand," Journal of Multinational Financial Management, Elsevier, vol. 19(3), pages 221-236, July.
    25. Ronald D. Watson, 2008. "Subprime Mortgages, Market Impact, and Safety Nets," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 11(03), pages 465-492.
    26. Fotios Pasiouras & Chrysovalantis Gaganis & Constantin Zopounidis, 2006. "The impact of bank regulations, supervision, market structure, and bank characteristics on individual bank ratings: A cross-country analysis," Review of Quantitative Finance and Accounting, Springer, vol. 27(4), pages 403-438, December.
    27. Ling Chu & Robert Mathieu & Sean Robb & Ping Zhang, 2007. "Bank capitalization and lending behavior after the introduction of the Basle Accord," Review of Quantitative Finance and Accounting, Springer, vol. 28(2), pages 147-162, February.
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    Cited by:

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    2. Bornemann, Sven & Kick, Thomas & Memmel, Christoph & Pfingsten, Andreas, 2012. "Are banks using hidden reserves to beat earnings benchmarks? Evidence from Germany," Journal of Banking & Finance, Elsevier, vol. 36(8), pages 2403-2415.
    3. Bornemann, Sven & Kick, Thomas & Pfingsten, Andreas & Schertler, Andrea, 2015. "Earnings baths by CEOs during turnovers: empirical evidence from German savings banks," Journal of Banking & Finance, Elsevier, vol. 53(C), pages 188-201.
    4. Li-Hua Lai & Li-Chin Hung & Chau-Jung Kuo, 2016. "Do Well-Financial Holding Company Organized Banks in Taiwan Take More Risk?," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 19(04), pages 1-30, December.
    5. Lartey, Theophilus & James, Gregory A. & Danso, Albert & Boateng, Agyenim, 2022. "Bank business models, failure risk and earnings opacity: A short- versus long-term perspective," International Review of Financial Analysis, Elsevier, vol. 80(C).
    6. Anachit Bagntasarian & Emmanuel Mamatzakis, 2019. "Testing for the underlying dynamics of bank capital buffer and performance nexus," Review of Quantitative Finance and Accounting, Springer, vol. 52(2), pages 347-380, February.
    7. Sushma Vishnani & Sonu Agarwal & Ritika Agarwalla & Saumya Gupta, 2019. "Earnings Management, Capital Management and Signalling Behaviour of Indian Banks," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 26(3), pages 285-295, September.
    8. Bornemann, Sven & Pfingsten, Andreas & Kick, Thomas & Schertler, Andrea, 2014. "Earnings baths by bank CEOs during turnovers," Discussion Papers 05/2014, Deutsche Bundesbank.
    9. Mamatzakis, Emmanuel & Bagntasarian, Anna, 2019. "The nexus between underlying dynamics of bank capital buffer and performance," MPRA Paper 92961, University Library of Munich, Germany.
    10. Bernard Gumb & Philippe Dupuy & Stéphane Jaumier, 2012. "De L'Impact Des Normes Comptables Sur Le Comportement Des Managers : Le Cas Des Trésoriers D'Entreprise," Grenoble Ecole de Management (Post-Print) hal-00691040, HAL.
    11. Sven Bornemann & Susanne Homölle & Carsten Hubensack & Thomas Kick & Andreas Pfingsten, 2014. "Visible Reserves in Banks – Determinants of Initial Creation, Usage and Contribution to Bank Stability," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 41(5-6), pages 507-544, June.
    12. Domikowsky, Christian & Bornemann, Sven & Duellmann, Klaus & Pfingsten, Andreas, 2014. "Loan loss provisioning and procyclicality: Evidence from an expected loss model," Discussion Papers 39/2014, Deutsche Bundesbank.
    13. Emre Kilic & Gerald Lobo & Tharindra Ranasinghe & Lin Yi, 2021. "Strategic usefulness of ignorance: evidence from income smoothing via retained interest of securitized loans," Review of Quantitative Finance and Accounting, Springer, vol. 56(1), pages 245-272, January.

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    More about this item

    Keywords

    Banks; Earnings management; Capital management; Bank size; Bank risk; C21; G21; G28; M41; M48;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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