scholarly journals Provisioning, Bank Behavior and Financial Crisis: Evidence from GCC Banks

2015 ◽  
Vol 11 (3) ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Bank Loan ◽  
Capital Regulation ◽  
Islamic Banks ◽  
Bank Capital ◽  
Loan Loss ◽  
Minimum Capital ◽  
Loan Loss Provisions ◽  
Bank Capital Regulation ◽  
Bank Behavior ◽  
Using Data

AbstractThe debate on bank capital regulation has in recent years devoted specific attention to the role that bank loan loss provisions play as a part of the overall minimum capital regulatory framework. Using data for 1996–2011, we find evidence in favor of both capital management and signaling behavior by GCC banks. Islamic banks appear to engage less in such behavior as compared to their non-Islamic counterparts.

scholarly journals The Procyclicality of Loan Loss Provisions in Islamic Banks

2016 ◽  
Author(s):  
Wahyoe Soedarmono ◽  
Sigid Eko Pramono ◽  
Amine Tarazi
Keyword(s):  
Islamic Banks ◽  
Loan Loss ◽  
Loan Loss Provisions

scholarly journals Does the New European Banking Regulation discourage Earnings Management?

2017 ◽  
Vol 10 (10) ◽  
pp. 45 ◽  
Author(s):  
Giuseppe Di Martino ◽  
Grazia Dicuonzo ◽  
Graziana Galeone ◽  
Vittorio Dell'Atti
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Banking Sector ◽  
Banking Regulation ◽  
Regulatory Framework ◽  
Loan Loss ◽  
Minimum Capital ◽  
Loan Loss Provisions ◽  
European Banking ◽  
Single Rulebook

In the recent past, the financial crisis has shown important lacks in the EU regulation relating to the banking sector, making the introduction of a unified regulatory framework necessary. Since June 2009 the European Council has recommended a “Single Rulebook”, that is a unique and harmonizing discipline applicable to all financial institutions in the Single Market, become effective on January 2014. This prudential discipline requires much more minimum capital, liquidity and information transparency and it defines format and minimum standards of contents.The aim of this research is to investigate the relation between the new mandatory disclosure and earnings management policies in banking sector realized through Loan Loss Provisions (LLP), the component of income statement mainly subject to manipulations, especially in form of earnings smoothing. Because the new integrated regulatory framework requires a more transparent disclosure, we expected that accruals manipulation (basically LLP) could be discouraged. The empirical analysis is based on a sample of 116 listed European banks over the period prior (2011-2012-2013) and after (2014-2015-2016) the effective date of the Single Rulebook. The evidence confirm our hypothesis suggesting that this banking reform discourages earnings manipulation and improves earnings quality, making financial reporting more useful for investors. The results are important to the regulatory institutions (such as European Union and European Central Bank) supporting more stringent discipline introduced by Basel III.

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