Journal of Banking & Finance

Items from 1 to 11 out of 11 results

article

Accounting for banks, capital regulation and risk-taking

Jing Li

Journal of Banking & Finance > 2017 > 74 > C > 102-121

This paper examines risk-taking incentives in banks under different accounting regimes in presence of capital regulation. In the model the bank jointly determines the capital issuance and investment policy. Given an exogenous minimum capital requirement, lower-of-cost-or-market accounting is the most effective regime that induces the bank to issue more excess equity capital above the minimum required...

article

Excess reserves, monetary policy and financial volatility

Keyra Primus

Journal of Banking & Finance > 2017 > 74 > C > 153-168

This paper examines the real and financial effects of reserves in a Dynamic Stochastic General Equilibrium (DSGE) model with monopoly banking and credit market imperfections. The framework explicitly accounts for the fact that commercial banks hold excess reserves and they incur costs in holding these assets. The model also accounts for imperfect substitutability between bank funding sources and it...

article

The international effect of managerial social capital on the cost of equity

Stephen P. Ferris, David Javakhadze, Tijana Rajkovic

Journal of Banking & Finance > 2017 > 74 > C > 69-84

We examine the effect of managerial social capital on the firm's cost of equity capital. We argue that social ties alleviate information asymmetry and agency problems, which in turn leads to a decrease in the cost of equity. Using a large panel of companies from 52 countries over the period 1999–2012, we document that social capital inversely affects the cost of equity. Our evidence suggests that...

article

One-sided performance measures under Gram-Charlier distributions

Angel León, Manuel Moreno

Journal of Banking & Finance > 2017 > 74 > C > 38-50

We derive closed-form expressions for risk measures based on partial moments by assuming the Gram-Charlier (GC) density for stock returns. As a result, the lower partial moment (LPM) measures can be expressed as linear functions on both skewness and excess kurtosis. Under this framework, we study the behavior of portfolio rankings with performance measures based on partial moments, that is, both Farinelli-Tibiletti...

article

Do Delaware CEOs get fired?

Murali Jagannathan, A.C. Pritchard

Journal of Banking & Finance > 2017 > 74 > C > 85-101

Critics have charged that state competition in corporate law, which Delaware dominates, leads to a “race to the bottom” making management unaccountable. We argue that Delaware corporate law attracts firms with particular financial and governance characteristics. We find that Delaware attracts growth firms in industries with more takeover activity. Delaware firms have smaller boards, and their directors...

article

Surprised or not surprised? The investors’ reaction to the comprehensive assessment preceding the launch of the banking union

Marika Carboni, Franco Fiordelisi, Ornella Ricci, Francesco Saverio Stentella Lopes

Journal of Banking & Finance > 2017 > 74 > C > 122-132

Did the Comprehensive Assessment (CA), preceding the Single Supervisory Mechanism (SSM) launch in Europe, achieve its aims of producing new valuable information for the market? We show that the CA achieved the goal of increasing transparency: investors were able to detect weak banks at the announcement of the procedure (23rd October 2013), but gained full information on the amount of the capital shortfall...

article

The impact of the European sovereign debt crisis on banks stocks. Some evidence of shift contagion in Europe

Jean-Pierre Allegret, Hélène Raymond, Houda Rharrabti

Journal of Banking & Finance > 2017 > 74 > C > 24-37

This paper analyzes the influence of the recent European sovereign debt crisis on banks’ equity returns for 15 countries. Our data span the period December 14th 2007-March 8th 2013 that encompasses several episodes of economic and financial turmoil since the collapse of the subprime credit market. Our contribution to the literature is twofold. First, we use an explicit multifactor model of equity...

article

Organizational structure, risk-based capital requirements, and the sales of downgraded bonds

Erin P. Lu, Gene C. Lai, Qingzhong Ma

Journal of Banking & Finance > 2017 > 74 > C > 51-68

Using bond downgrades as external shocks to life insurers’ asset risk, we document several findings of the impact of organizational structure and risk factors on investment risk taking. First, we find that mutual insurers and widely-held stock insurers are more likely to sell downgraded bonds than are closely-held stock insurers. Second, we find evidence that insurers are less likely to sell downgraded...

article

Special purpose entities and bank loan contracting

Jeong-Bon Kim, Byron Y. Song, Zheng Wang

Journal of Banking & Finance > 2017 > 74 > C > 133-152

In this study, we show that a firm's use of special purpose entities (SPEs) is associated with unfavorable loan contract terms, including higher loan rates, collateral requirements, and restrictive covenants. Further analyses suggest that the association between the use of SPEs and unfavorable loan contract terms is primarily due to the increase in the information risk faced by lenders, as firm managers...

article

Editorial Board

Journal of Banking & Finance > 2017 > 74 > C > IFC

article

Information environment and earnings management of dual class firms around the world

Ting Li, Nataliya Zaiats

Journal of Banking & Finance > 2017 > 74 > C > 1-23

This study examines the information environment and earnings management of dual class firms. Motivated by the pronounced entrenchment phenomenon at dual class firms due to divergence between voting and cash flow rights, we are interested in whether dual class firms adopt corporate disclosure choices that imply greater opacity as well as employ judgment in financing reporting to misguide the outside...

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C
Volume:
74
Year:
2017

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Keywords

EARNINGS MANAGEMENT (2)
BANK RISK-TAKING (1)
BANKING (1)
BANKS’ EQUITY RETURNS (1)
CAPITAL REGULATION (1)
CEO TURNOVER (1)
CERTAINTY EQUIVALENT (1)
CHARTER COMPETITION (1)
CONTAGION (1)
CORPORATE BOND INVESTMENT (1)
CORPORATE GOVERNANCE (1)
COST OF CAPITAL (1)
COUNTERCYCLICAL RESERVE REQUIREMENTS (1)
DOWNGRADE (1)
DUAL CLASS (1)
EUROPEAN SOVEREIGN DEBT CRISIS (1)
EXCESS RESERVES (1)
FAIR VALUE ACCOUNTING (1)
FINANCIAL VOLATILITY (1)
INFORMATION ENVIRONMENT (1)
INFORMATION RISK (1)
INTERDEPENDENCE (1)
INVESTOR PROTECTION (1)
LENDING (1)
LIFE INSURER (1)
LOAN CONTRACTING (1)
LOWER-OF-COST-OR-MARKET ACCOUNTING (1)
LOWER/UPPER PARTIAL MOMENT (1)
RANK CORRELATION (1)
REGULATION (1)
RISK-BASED CAPITAL (1)
RISK-TAKING (1)
SEMI NON-PARAMETRIC DISTRIBUTION (1)
SMOOTH TRANSITION REGRESSION MODEL (1)
SOCIAL CAPITAL (1)
SOCIAL NETWORKS (1)
SPECIAL PURPOSE ENTITY (1)
SUPERVISION (1)
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