Regulatory and contextual factors influencing earnings and capital management decisions: evidence from the European banking sector

IF 1.9 Q2 BUSINESS, FINANCE Review of Quantitative Finance and Accounting Pub Date : 2024-03-24 DOI:10.1007/s11156-024-01253-9

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Abstract

This study investigates whether some regulatory and contextual features influenced Euro Area listed banks decisions to manage earnings and regulatory capital through discretionary provisions in the period 2013–2018. The new regulation factors are the pressure to increase high-quality regulatory capital (Basel III) and more timely recognition of loan losses (IFRS 9). The contextual features are the intensified banking competition at a national level, and the significant money market pressure. Results demonstrate that the pressure to increase high-quality regulatory capital for banks with lower Common Equity Tier 1 capital (CET1) in year t − 1 is negatively associated with upward earnings and capital management in year t. The more timely recognition of loan losses in year t compared to year t + 1 is negatively associated with upward earnings and capital management in year t. The strengthening of banking competition is positively associated with upward earnings management, but not associated with upward capital management. The increasing money market pressure is negatively associated with upward earnings management, but not associated with upward capital management. This study should be helpful to standard-setters, regulators, investors and academics interested in incentives and constraints to earnings and capital management by providing evidence regarding how listed banks reacted to the regulatory, accounting, and contextual factors, observed holistically during a unique historical period (i.e., 2013–2018) and regulatory setting (i.e., European banking sector).

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影响盈利和资本管理决策的监管和环境因素：欧洲银行业的证据

摘要本研究探讨了一些监管和环境特征是否影响了欧元区上市银行在 2013-2018 年期间通过酌情拨备管理盈利和监管资本的决策。新的监管因素是增加高质量监管资本的压力（巴塞尔协议 III）和更及时地确认贷款损失（国际财务报告准则 9）。背景特征是全国范围内银行业竞争的加剧以及货币市场的巨大压力。结果表明，t - 1 年普通股一级资本（CET1）较低的银行增加高质量监管资本的压力与 t 年上调收益和资本管理负相关。货币市场压力的增加与向上收益管理负相关，但与向上资本管理无关。这项研究为标准制定者、监管者、投资者和对盈利和资本管理的激励与约束感兴趣的学者提供了证据，说明在一个独特的历史时期（即 2013-2018 年）和监管环境（即欧洲银行业）中，上市银行如何对监管、会计和环境因素做出反应。

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来源期刊

Review of Quantitative Finance and Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

17.60%

发文量

期刊介绍： Review of Quantitative Finance and Accounting deals with research involving the interaction of finance with accounting, economics, and quantitative methods, focused on finance and accounting. The papers published present useful theoretical and methodological results with the support of interesting empirical applications. Purely theoretical and methodological research with the potential for important applications is also published. Besides the traditional high-quality theoretical and empirical research in finance, the journal also publishes papers dealing with interdisciplinary topics.