The Effect Of Covid 19 On Loan Loss Provisions And Earnings Management Of European Banks

Author : Merjona Lamaj
Publisher : Springer Nature
Page : 69 pages
File Size : 47,6 Mb
Release : 2023-01-12
Category : Business & Economics
ISBN : 9783658400606

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The Effect of Covid-19 on Loan Loss Provisions and Earnings Management of European Banks by Merjona Lamaj Pdf

This book examines the effect of Covid-19 on loan loss provisions (LLPs) and earnings management of European banks. Specifically, the author analyzes how the high flexibility offered by prudential authorities and standard setters in the context of Covid-19 affects banks’ use of discretion when accounting for loan loss provisions. She finds that during Covid-19 banks use discretionary LLPs to a greater extent than before Covid-19. This trend is more evident for banks located in countries that have implemented strong containment measures as a response to the Covid-19 pandemic. Moreover, while banks tend to overstate LLPs at the beginning of the pandemic, they do, on average, understate them during 2021. Finally, examining the direction of earnings management the author finds that during Covid-19 banks use upward earnings management, whereas before Covid-19 they engage in downward earnings management.

Author : Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan
Publisher : International Monetary Fund
Page : 114 pages
File Size : 44,9 Mb
Release : 2021-03-26
Category : Business & Economics
ISBN : 9781513572772

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COVID-19: How Will European Banks Fare? by Mr.Shekhar Aiyar,Mai Chi Dao,Mr.Andreas A. Jobst,Ms.Aiko Mineshima,Ms.Srobona Mitra,Mahmood Pradhan Pdf

This paper evaluates the impact of the crisis on European banks’ capital under a range of macroeconomic scenarios, using granular data on the size and riskiness of sectoral exposures. The analysis incorporates the important role of pandemic-related policy support, including not only regulatory relief for banks, but also policies to support businesses and households, which act to shield the financial sector from the real economic shock.

Author : Alain Laurin,Giovanni Majnoni,World Bank
Publisher : World Bank Publications
Page : 64 pages
File Size : 44,6 Mb
Release : 2003
Category : Bank loans
ISBN : 0821353977

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Bank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries by Alain Laurin,Giovanni Majnoni,World Bank Pdf

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : INTERNATIONAL MONETARY FUND
Page : 118 pages
File Size : 49,5 Mb
Release : 2020-10-23
Category : Business & Economics
ISBN : 1513554220

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Global Financial Stability Report, October 2020 by International Monetary Fund. Monetary and Capital Markets Department Pdf

Near-term global financial stability risks have been contained as an unprecedented policy response to the coronavirus (COVID-19) pandemic has helped avert a financial meltdown and maintain the flow of credit to the economy. For the first time, many emerging market central banks have launched asset purchase programs to support the smooth functioning of financial markets and the overall economy. But the outlook remains highly uncertain, and vulnerabilities are rising, representing potential headwinds to recovery. The report presents an assessment of the real-financial disconnect, as well as forward-looking analysis of nonfinancial firms, banks, and emerging market capital flows. After the outbreak, firms’ cash flows were adversely affected as economic activity declined sharply. More vulnerable firms—those with weaker solvency and liquidity positions and smaller size—experienced greater financial stress than their peers in the early stages of the crisis. As the crisis unfolds, corporate liquidity pressures may morph into insolvencies, especially if the recovery is delayed. Small and medium-sized enterprises (SMEs) are more vulnerable than large firms with access to capital markets. Although the global banking system is well capitalized, some banking systems may experience capital shortfalls in an adverse scenario, even with the currently deployed policy measures. The report also assesses the pandemic’s impact on firms’ environmental performance to gauge the extent to which the crisis may result in a reversal of the gains posted in recent years.

Author : Simon Grima,Ercan Özen,Hakan Boz
Publisher : Emerald Group Publishing
Page : 196 pages
File Size : 49,8 Mb
Release : 2022-09-16
Category : Business & Economics
ISBN : 9781803829838

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The New Digital Era by Simon Grima,Ercan Özen,Hakan Boz Pdf

The New Digital Era’s two volumes vitally generate new information in order to determine the advantages and risks in which areas this digitalization, which has increased with the COVID-19 pandemic.

Author : Eleonora Santos,Neuza Ribeiro,Teresa Eugénio
Publisher : Springer Nature
Page : 499 pages
File Size : 48,7 Mb
Release : 2023-04-13
Category : Business & Economics
ISBN : 9789811984853

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Rethinking Management and Economics in the New 20’s by Eleonora Santos,Neuza Ribeiro,Teresa Eugénio Pdf

This proceedings book showcases papers presented at the 2022 Rethinking Management and Economics in the (New) 20s conference in Leiria, Portugal. Rethinking Management and Economics in the (New) 20’s is focused on the investigation of key challenges and perspectives of Management and Economics. The chapters in this book explore new avenues of research and cover theoretical, empirical, and experimental studies related to different themes in the global context of Management and Economics. This book contributes towards deepening our understanding of what the new problems associated with achieving the goals of management and Economics in the 2020s and present possible solutions to the problems. This book is ideal for economists, businesses, managers, accountants, practitioners, stakeholders, researchers, academicians, and students who are interested in the current issues and advancements in corporate governance and earnings management.

Author : Richard M. Levich,Giovanni Majnoni,Carmen Reinhart
Publisher : Springer Science & Business Media
Page : 380 pages
File Size : 43,8 Mb
Release : 2012-12-06
Category : Business & Economics
ISBN : 9781461509998

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Ratings, Rating Agencies and the Global Financial System by Richard M. Levich,Giovanni Majnoni,Carmen Reinhart Pdf

Ratings, Rating Agencies and the Global Financial System brings together the research of economists at New York University and the University of Maryland, along with those from the private sector, government bodies, and other universities. The first section of the volume focuses on the historical origins of the credit rating business and its present day industrial organization structure. The second section presents several empirical studies crafted largely around individual firm-level or bank-level data. These studies examine (a) the relationship between ratings and the default and recovery experience of corporate borrowers, (b) the comparability of credit ratings made by domestic and foreign rating agencies, and (c) the usefulness of financial market indicators for rating banks, among other topics. In the third section, the record of sovereign credit ratings in predicting financial crises and the reaction of financial markets to changes in credit ratings is examined. The final section of the volume emphasizes policy issues now facing regulators and credit rating agencies.

Author : Mr. Shekhar Aiyar,Mr. Dermot Monaghan
Publisher : International Monetary Fund
Page : 79 pages
File Size : 53,6 Mb
Release : 2015-09-24
Category : Business & Economics
ISBN : 9781513511658

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A Strategy for Resolving Europe's Problem Loans by Mr. Shekhar Aiyar,Mr. Dermot Monaghan Pdf

Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.

Author : Joshua Ronen,Varda Yaari
Publisher : Springer Science & Business Media
Page : 582 pages
File Size : 44,8 Mb
Release : 2008-08-06
Category : Business & Economics
ISBN : 9780387257716

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Earnings Management by Joshua Ronen,Varda Yaari Pdf

This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?

Author : Torsten Wezel,Mr.Jorge A. Chan-Lau,Mr.Francesco Columba
Publisher : International Monetary Fund
Page : 105 pages
File Size : 42,8 Mb
Release : 2012-05-01
Category : Business & Economics
ISBN : 9781475563467

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Dynamic Loan Loss Provisioning by Torsten Wezel,Mr.Jorge A. Chan-Lau,Mr.Francesco Columba Pdf

This simulation-based paper investigates the impact of different methods of dynamic provisioning on bank soundness and shows that this increasingly popular macroprudential tool can smooth provisioning costs over the credit cycle and lower banks’ probability of default. In addition, the paper offers an in-depth guide to implementation that addresses pertinent issues related to data requirements, calibration and safeguards as well as accounting, disclosure and tax treatment. It also discusses the interaction of dynamic provisioning with other macroprudential instruments such as countercyclical capital.

Author : Ms.Emilia Magdalena Jurzyk,Olena Havrylchyk
Publisher : International Monetary Fund
Page : 41 pages
File Size : 48,6 Mb
Release : 2010-01-01
Category : Business & Economics
ISBN : 9781451961713

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Inherited or Earned? Performance of Foreign Banks in Central and Eastern Europe by Ms.Emilia Magdalena Jurzyk,Olena Havrylchyk Pdf

Using a combination of propensity score matching and difference-in-difference techniques we investigate the impact of foreign bank ownership on the performance and market power of acquired banks operating in Central and Eastern Europe. This approach allows us to control for selection bias as larger but less profitable banks were more likely to be acquired by foreign investors. We show that during three years after the takeover, banks have become more profitable due to cost minimization and better risk management. They have additionally gained market share, because they passed their lower cost of funds to borrowers in terms of lower lending rates. Previous studies failed to pick up the improvements in performance of takeover banks, because they did not account for the performance of financial institutions before acquisitions.

Author : Daniel Tarullo
Publisher : Columbia University Press
Page : 256 pages
File Size : 53,9 Mb
Release : 2008-11-30
Category : Business & Economics
ISBN : 9780881324914

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Banking On Basel by Daniel Tarullo Pdf

The turmoil in financial markets that resulted from the 2007 subprime mortgage crisis in the United States indicates the need to dramatically transform regulation and supervision of financial institutions. Would these institutions have been sounder if the 2004 Revised Framework on International Convergence of Capital Measurement and Capital Standards (Basel II accord)—negotiated between 1999 and 2004—had already been fully implemented? Basel II represents a dramatic change in capital regulation of large banks in the countries represented on the Basel Committee on Banking Supervision: Its internal ratings–based approaches to capital regulation will allow large banks to use their own credit risk models to set minimum capital requirements. The Basel Committee itself implicitly acknowledged in spring 2008 that the revised framework would not have been adequate to contain the risks exposed by the subprime crisis and needed strengthening. This crisis has highlighted two more basic questions about Basel II: One, is the method of capital regulation incorporated in the revised framework fundamentally misguided? Two, even if the basic Basel II approach has promise as a paradigm for domestic regulation, is the effort at extensive international harmonization of capital rules and supervisory practice useful and appropriate? This book provides the answers. It evaluates Basel II as a bank regulatory paradigm and as an international arrangement, considers some possible alternatives, and recommends significant changes in the arrangement.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 120 pages
File Size : 55,9 Mb
Release : 2020-04-14
Category : Business & Economics
ISBN : 9781513529196

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Global Financial Stability Report, April 2020 by International Monetary Fund. Monetary and Capital Markets Department Pdf

The April 2020 Global Financial Stability Report (GFSR) assesses the financial stability challenges posed by the coronavirus (COVID-19) pandemic. Chapter 1 describes how financial conditions tightened abrubtly with the onset of the pandemic, with risk asset prices dropping sharply as investors rushed to safety and liquidity. It finds that a further tightening of financial conditions may expose vulnerabilities, including among nonbank financial institutions, and that bank resilience may be tested if economic and financial market stresses rise. Vulnerabilities in global risky corporate credit markets, including weakened credit quality of borrowers, looser underwriting standards, liquidity risks at investment funds, and increased interconnectedness, could generate losses at nonbank financial institutions in a severe adverse scenario, as discussed in Chapter 2. The pandemic led to an unprecedented and sharp reversal of portfolio flows, highlighting the challenges of managing flows in emerging and frontier markets. Chapter 3 shows that global financial conditions tend to influence portfolio flows more during surges than in normal times, that stronger domestic fundamentals can help mitigate outflows, and that greater foreign participation in local currency bond markets may increase price volatility where domestic markets lack depth. Beyond the immediate challenges of COVID-19, Chapter 4 explores the profitability pressures that banks are likely to face over the medium term in an environment where low interest rates are expected to persist. Chapter 5 takes a broader perspective on physical risks associated with climate change. It finds that these risks do not appear to be reflected in global equity valuations and that stress testing and better disclosure of exposures to climatic hazards are essential to better assess physical risk.

Author : Board of Governors of the Federal Reserve System
Publisher : Unknown
Page : 0 pages
File Size : 49,8 Mb
Release : 2002
Category : Banks and Banking
ISBN : 0894991965

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The Federal Reserve System Purposes and Functions by Board of Governors of the Federal Reserve System Pdf

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Mr.Akihiro Kanaya,Mr.David Woo
Publisher : International Monetary Fund
Page : 48 pages
File Size : 50,7 Mb
Release : 2000-01-01
Category : Business & Economics
ISBN : 9781451842401

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The Japanese Banking Crisis of the 1990's by Mr.Akihiro Kanaya,Mr.David Woo Pdf

For a large part of the past decade, Japan has witnessed a steady deterioration in the health of its banking system. This paper examines what went wrong and why it has taken so long for the system to recover. While the paper traces the roots of the crisis to accelerated deregulation and deepening of capital markets without an appropriate adjustment in the regulatory framework, it identifies weak corporate governance and regulatory forbearance as the two factors behind what might have been an unnecessary prolongation of the distress of the financial system.