The effect of Basel 3 on earnings management using loan loss provisions

• Autor(a) principal: Rosvold, Iselin
• Data de Publicação: 2017
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/27897
• topic: Earnings management; International regulation; Loan loss provisions; European banks; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

In this paper, I look at the effect of the implementation of Basel III on the practice of earnings smoothing using loan loss provisions in listed European banks. The aim is to contribute to a better understanding of how international regulation influence discretionary behavior, as well as considering if the Basel enhancements reduce aggressive income smoothing, as the activity can lead to consequences contrary to the regulation’s objectives. My main findings were statistically insignificant, however it indicated an effect of a reduced earnings smoothing activity using loan loss provisions in the three years after Basel III was implemented.