scholarly journals The comparability of IFRS 7 in the European banking sector

2017 ◽  
Vol 14 (4) ◽  
pp. 8-14
Author(s):  
Alessandra Allini ◽  
Luca Ferri ◽  
Marco Maffei ◽  
Annamaria Zampella
Keyword(s):  
Banking Sector ◽  
Global Financial Crisis ◽  
Annual Reports ◽  
Financial Risks ◽  
Risk Disclosure ◽  
Negative Effects ◽  
Ifrs 7 ◽  
Medium Level ◽  
European Banking ◽  
Regulatory Bodies

The aim of this paper is to investigate the level of comparability of the IFRS 7 Financial Instruments Disclosure in banks’ annual reports across different European countries (Italy, Spain, France, Germany and UK) from 2007 to 2014. The banking sector seems to be particularly concerned with the issue of financial risks, especially during the most recent global financial crisis. In addition, risk disclosure has led to vigorous debates at both the national and international levels among scholars and standard setters. To test the comparability across countries, we use the van der Tas C index. Our results show that there is a medium level of comparability. Despite the accounting boards’ and authorities’ commitment to regulating this information, there are still substantial differences in the practices of risk disclosure, which have negative effects on comparability. Our results show that an increase in the degree of comparability exists during the observed period but we are still far from a condition of full comparability due to the presence of factors other than regulations that may affect accounting practices. These findings could be helpful for the decisions of institutional regulatory bodies and for investors.

scholarly journals Determinants of financial instruments risk disclosure: An empirical analysis in the banking sector

2020 ◽  
Vol 17 (2) ◽  
pp. 20-31
Author(s):  
Alessandra Allini ◽  
Luca Ferri ◽  
Marco Maffei ◽  
Annamaria Zampella
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Optimal Level ◽  
Financial Instruments ◽  
Risk Disclosure ◽  
Country Factors ◽  
Ifrs 7 ◽  
European Banking ◽  
Country Selection ◽  
The Uk

This study investigates the effects of firm and country factors, considered as determinants of the financial instruments risk disclosure (FIRD) proxied by IFRS 7 in the European banking system. We select 582 banks-year observations based on the largest five European economies (France, Germany, Italy, Spain and the UK) as provided by the International Monetary Fund (IMF). Our analysis covers a period of 8 years (2007-2014) and adopts an OLS model. Results show that both firm (the type of auditor, board size and profitability) and country factors (financing environment, regulatory environment, and organizational status) affect FIRD. Limitations for this paper could relate to country selection, as well as on the breadth of the sample. Nevertheless, these aspects could unveil possible areas of future inquiry. The contribution of the study is twofold. It enriches the literature about firm and country determinants on financial instruments risk disclosure, as combined rather than single-standing variables. Yet, it draws the attention of banks’ management and investors on what the crucial factors to reach an optimal level of FIRD are and gain the confidence of capital markets, reducing information asymmetries. This is the first empirical investigation on the determinants of FIRD, using IFRS 7, in the European banking sector that adopts firm and country factors in a combined effort.

The determinants of risk disclosure by banking institutions

2016 ◽  
Vol 24 (4) ◽  
pp. 426-444 ◽  
Author(s):  
Shamsun Nahar ◽  
Mohammad Azim ◽  
Christine Jubb
Keyword(s):  
Agency Theory ◽  
Financial Institution ◽  
Basel Ii ◽  
Market Discipline ◽  
Annual Reports ◽  
Risk Disclosure ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Content Type ◽  
Ifrs 7

Purpose The purpose of this paper is to investigate the extent of risk disclosure and the factors determining this for all listed banks in Bangladesh. Design/methodology/approach Relying on a theoretical framework based on agency theory and the creation of a risk disclosure index (RDI) based on International Financial Reporting Standard (IFRS) 7, Basel II: market discipline, and prior literature, hand-collected data from the annual reports of all 30 banks traded on the Dhaka Stock Exchange over 2007-2012, creating 180 bank-year observations, are analysed. Findings The study suggests that implementation of IFRS 7 and Basel II: market discipline standards in a non-mandated environment raised the extent of risk disclosure in every category of financial institution risk (market, credit, liquidity, operational and equities). The effect can be attributed to regulatory concerns and voluntary adoption of international disclosure standards in the banking industry in Bangladesh. Specifically, whilst the determinants of disclosure vary across types of risk, the number of risk committees, leverage, company size, the existence of a risk management unit, board size and a Big4 affiliate auditor are significant determinants of at least one category of risk disclosure. Research limitations/implications The source of risk disclosures is limited to listed banks’ annual reports. Practical implications The RDI, developed in this paper, contributes to the literature by: first, quantifying the extent of each of five types of risk disclosure; and second, identifying the factors determining them. Stakeholders, particularly depositors and investors, can use this index to select or monitor their bank of interest. Originality/value The RDI was developed according to the most relevant standards – IFRS 7 and Basel II: market discipline, plus prior scholarly literature. This type of benchmarking has not been conducted to date in previous studies. Inferences about risk disclosure are based on archival data derived from all listed banks in a virtually unregulated environment. Further, the study complements the literature by providing support for the applicability of agency theory in investigating the level of risk disclosure by banks.

Determinants of corporate social responsibility disclosures of UAE national banks: a multi-perspective approach

2019 ◽  
Vol 16 (5) ◽  
pp. 631-654
Author(s):  
Elie Menassa ◽  
Nancy Dagher
Keyword(s):  
Financial Crisis ◽  
Financial Performance ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Arab World ◽  
Annual Reports ◽  
Content Type ◽  
Explanatory Factors ◽  
The World ◽  
Corporate Social

PurposeThis paper aims to examine the determinants and extent of corporate social disclosure (CSD) by UAE national banks and to investigate the changes in CSD before, during and after the latest financial crisis.Design/methodology/approachDeductive in nature, this paper uses content analysis of annual reports of 16 UAE banks over a period of six years (2006-2011) to test eight hypotheses related to size, financial performance and other variables as potential explanatory variables of the CSD extent over different periods.FindingsThe findings show that human resources and community disclosures exhibited the highest extent of CSD over the six years. Moreover, the size and financial performance variables appear to be significant explanatory factors for the extent of CSD. The findings also indicate a strong variation in disclosure between banks with international presence and those with no such presence, while there is no significant disclosure variation between Islamic and conventional banks or during the different periods under investigation (pre, during and post recent financial crisis).Research limitations/implicationsStudies allowing a greater understanding of how banks with extensive governmental ownership define and disclose CSR in this particular region of the world are scarce and exploratory in nature. Consequently, the structure of national UAE banks provides a unique opportunity to understand the CSR mechanisms and disclosure of similar institutions in the world (particularly in the Arab world). This presents an interesting direction for further research.Practical implicationsThese findings could assist UAE bankers and policymakers in integrating CSD in their corporate strategies and help the local and international business communities in understanding the characteristics of CSD in the UAE.Originality/valueComprehensive in scope, this paper provides a complete assessment of the potential explanatory proxies of CSD by UAE local banks before, during and after the recent global financial crisis. Comparable studies of the UAE banking sector have mainly focused on particular bank types (i.e. Islamic or conventional) and did not consider the effect of the recent adverse financial climate.

scholarly journals Disclosure of risk information in the European banking sector

2016 ◽  
pp. 350-366
Author(s):  
Emilia Klepczarek
Keyword(s):  
Financial Markets ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
The Public ◽  
Market Participants ◽  
European Banking ◽  
Adequate Quantity ◽  
The Global Financial Crisis ◽  
Risk Disclosures ◽  
Working Out

A debate on the scope of bank information disclosures seems to be essential, especially after the Global Financial Crisis. The adequate quantity of data provided to the public domain is a condition of transparency of the banking sector which should assure the optimization of market participants’ decisions. There is also a tendency to unify global accountancy standards, and they are expected to ensure the same scope of disclosed information for the global financial market. The aim of the study is to investigate if there are any differences with the number of risk disclosures among the banks using GAAP and IFRS accounting standards, and if more stable banking sectors tend to report a wider scope of data. Finding out the nature of the determinants of disclosures is an important aspect in terms of working out the procedures which will increase the transparency and stability of the financial markets.

scholarly journals The level of financial inclusion in Ukraine: Measuring access, quality, and usage of financial products and services

2021 ◽  
Vol 16 (2) ◽  
pp. 59-67
Author(s):  
Yuliia Shapoval ◽  
Andrii Shkliar ◽  
Oleksii Shpanel-Yukhta ◽  
Kateryna Gruber
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Financial Inclusion ◽  
Clear Understanding ◽  
Financial Products ◽  
Medium Level ◽  
The Global Financial Crisis

While financial inclusion is seen as a goal of socio-economic development, there is still no clear understanding of how to measure it. Following this concern, the paper deals with the computation of the financial inclusion index of the Ukrainian economy using an annual dataset spanning from 2008 to 2020 and following the Sarma methodology. The object of the study is a set of indicators of usage, access and quality of financial products and services. The obtained results demonstrate the medium level of financial inclusion. The improvement of financial inclusion is observed in 2012, 2013, 2020 (namely 0.55 – 0.56 in the range of 0 and 1). From 2015 (0.38) till 2018 (0.39), the revealed downward trend affirms that the withdrawal of banks from the market has deteriorated the level of quality and usage of financial products and services. Financial inclusion declined during the cleaning up of the banking system in 2014–2016, just as it did after the global financial crisis in 2009–2010. Despite the development of the payment infrastructure, there is a need to diversify access, increase quality, and quicken the usage of financial products and services due to existing distrust in national financial institutions. Improving financial literacy and consumer protection, and closing regulatory gaps in the non-banking sector are seen as ways to enhance financial inclusion. Thus, financial regulators should establish an upward trend in financial inclusion that will ensure full access to formal financial services and will not adversely affect the stability of financial system.

scholarly journals Studi Empiris Kekuatan Stabilitas Keuangan Perbankan Syariah di Indonesia

2019 ◽  
Vol 8 (2) ◽  
pp. 147
Author(s):  
Elok Heniwati
Keyword(s):  
Banking Sector ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Islamic Banking ◽  
Insolvency Risk ◽  
Conventional Banks ◽  
The Stability ◽  
The Global Financial Crisis

The study aims to examine the stability of Islamic banking in Indonesia after the global financial crisis. This study is significant, considering the rapidly growth of Islamic banking in Indonesia and uniqueness of its operating systems and products. By using secondary data from the annual reports of the banking sector listed on the Indonesia Stock Exchange (IDX) for the period from 2013 to 2016, regression analysis with the ZSCORE function (insolvency risk) as the dependent variable and a number of predictor variables (firm-specific, macroeconomic and governance) are used as tools for achieving research objectives. To check the robustness of the research findings, a model with different specifications has been used. The results indicate that profitability and firm size have a significant influence on the insolvency risk (ZSCORE) of banks and empirical factors that influence these risks differ between Islamic banks and conventional banks.

scholarly journals Liquidity of Czech and Slovak commercial banks

2012 ◽  
Vol 60 (7) ◽  
pp. 463-476 ◽  
Author(s):  
Pavla Vodová
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Annual Reports ◽  
Lender Of Last Resort ◽  
Liquidity Crises ◽  
Lending Activity ◽  
The Impact

As liquidity problems of some banks during global financial crisis re-emphasized, liquidity is very important for functioning of financial markets and the banking sector. The aim of this paper is therefore to evaluate comprehensively the liquidity positions of Czech and Slovak commercial banks via different liquidity ratios in the period of 2001–2010 and to find out whether the strategy for liquidity management differs by the size of the bank. We used unconsolidated balance sheet data over the period from 2001 to 2010 which were obtained from annual reports of Czech and Slovak banks. The sample includes significant part of Czech and Slovak banking sector (not only by the number of banks, but also by their share on total banking assets). We have calculated five different liquidity ratios for each bank in the sample. The results showed that liquidity of Czech banks has declined during last ten years. On the contrary, liquidity of Slovak banks fluctuated only slightly during the period 2001–2008. Bank liquidity has fallen due to the financial crisis in both countries; the impact is worse for Slovak banks. Both Czech and Slovak banks have become less liquid also as a result of increase in lending activity. Czech and Slovak banks have the same strategies how to insure against liquidity crises: big banks rely on the interbank market or on a liquidity assistance of the Lender of Last Resort, small and medium sized banks hold buffer of liquid assets.

scholarly journals Common Ownership Patterns in the European Banking Sector—The Impact of the Financial Crisis1

2021 ◽  
Author(s):  
Albert Banal-Estañol ◽  
Nuria Boot ◽  
Jo Seldeslachts
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Common Ownership ◽  
European Banking ◽  
And Performance ◽  
The Global Financial Crisis ◽  
The Impact ◽  
Capital Injections ◽  
Ownership Patterns

Abstract We provide a description of ownership patterns in the top 25 European banks for the period 2003–2015, where we especially focus on the global financial crisis. Investment managers, such as Blackrock, are dominant in terms of number of blockholdings in different banks, maintaining fairly stable “common ownership” networks throughout our sample. However, the financial crisis led to capital injections by governments in several banks in trouble, which in turn led to a jump in holdings by governments, which typically are “non-common owners” (i.e., they hold only shares in only one bank). This jump translated into these investors temporarily being the top investor with a large share, and non-common owners being the majority among large shareholders. A brief comparison with US banks uncovers large ownership differences between the European and US banking sectors. We briefly discuss what these ownership patterns might imply for competition, stability and performance in the banking industry.

scholarly journals Relationship between Corporate Governance and Risk Disclosure Practice from Malaysia Perspective

2019 ◽  
Author(s):  
Ag Kaifah Riyard Bin Kiflee ◽  
Mohd Noor Azli Bin Ali Khan
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Global Financial Crisis ◽  
Auditor Independence ◽  
Annual Reports ◽  
Risk Disclosure ◽  
Accounting Scandals ◽  
The Relationship ◽  
Disclosure Practice

Past accounting scandals (Transmile and Megan Media) and recent 2007/2008 global financial crisis have triggered the need for vibrant risk management and high quality of risk reporting through sound corporate governance. This study will measure risk management through the disclosure in the annual reports. It wishes to determine the presence of risk information within the annual report of non-financial companies in Malaysia. The objective of the study is to examine the relationship between corporate governance characteristics and risk disclosure practice. The corporate governance characteristics examined include board independence, the board size, board gender, auditor independence and auditor tenure. A total of 721 companies are expected to be analyzed based on the Bursa Malaysia list from 2008 to 2017. To determine the level of risk disclosure, this study will employ content analysis. Descriptive statistics and multiple regression will be used in this study to examine this relationship.

Exploring financial risks disclosure: evidence from Indian listed companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chandani Khandelwal ◽  
Satish Kumar ◽  
Deepak Verma
Keyword(s):  
Financial Risk ◽  
Design Methodology ◽  
Stock Exchange ◽  
General Pattern ◽  
Listed Companies ◽  
Annual Reports ◽  
Financial Risks ◽  
Risk Disclosure ◽  
Content Type ◽  
Different Types

Purpose The purpose of this paper is to contribute to the existing literature on financial risk disclosure by examining a sample of non-financial Indian companies listed on the Bombay stock exchange (BSE) to explore the degree of information about financial risks contained in their annual reports. Design/methodology/approach To study the financial risk disclosure of Indian companies, a sample of 206 non-financial companies has been derived from the top 500 listed companies at BSE. The method used in this study to analyze risk disclosure is content analysis. A total of 1,854 annual reports are scanned through software Nvivo-12 to find different types of risk words. Overall, risk disclosure, category wise risk disclosure, year-wise risk disclosure and sector-wise risk disclosure are assessed. The risk disclosure index is also computed. Findings The results show that there are some risk disclosure practices in Indian companies. No general pattern is observed. Companies are following vague method of risk disclosure. In the true sense, Indian companies are now started risk disclosure practices since 2018. This may be because of pressure from regulating bodies and stakeholders with greater detail about their financial risks. Originality/value This study is carried out for Indian non-financial companies. The paper adds to the literature relating to financial risk disclosure in developing countries.

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