Earnings versus capital ratios management: role of bank types and SFAS 114

Earnings versus capital ratios management: role of bank types and SFAS 114 We document in this paper that large banks use Loan Loss Provisions (LLP) more than small banks to manage reported earnings, but we find no significant difference in the use of LLP to manage capital ratios between large and small banks. Additionally, we document that banks with high risk asset portfolios use more LLP to manage reported earnings as well as capital ratios compared to the banks with low risk asset portfolios. Our findings also show that SFAS 114 has a moderating effect on the use of LLP to manage reported earnings, especially by large banks, but there is no conclusive evidence on the impact of SFAS 114 to manage capital ratios. Furthermore, the findings show that there has been significantly more earnings management during the 2007–2008 financial crisis compared to earlier periods. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Earnings versus capital ratios management: role of bank types and SFAS 114

Loading next page...
Springer US
Copyright © 2010 by Springer Science+Business Media, LLC
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
Publisher site
See Article on Publisher Site


  • Bank loan loss provisions: a reexamination of capital management, earnings management and signaling effects
    Ahmed, A; Takeda, SC; Thomas, S

You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial