In this paper, we assess the effects of CEO stock options on three key corporate policies for banks: investment choice, amount of borrowing, and level of capital. Using a sample of 549 bank-years for publicly traded banks from 1992 to 2002, we find that stock option grants lead CEOs to undertake...

IFRS 9 substantially affects the financial sector by changing the impairment methodology for credit losses. This paper analyzes the implications of the change from IAS 39 to IFRS 9 in the context of bank resilience. We shed light on two effects. First, the "cliff-effect", which refers to sudden...

In this paper, I review the empirical literature in the intersection of banks and corporate income taxation that emerged over the last two decades. To structure the included studies, I use a stakeholder approach and outline how corporate income taxation plays into the relation of banks and their...

In this paper we provide evidence for the effects of social norms on audit pricing by studying companies belonging to the alcohol, firearms, gambling, military, nuclear power, and tobacco industries, which are often described as "sin" companies. We hypothesize that the disparities between "sin"...

Following a prototype economic modellingapproach for Small-Medium Banks (SMBs) business plans according to structure of Additional Funds Needed (AFN) models this paper examines the volatility of banking efficiency in terms of Key Profitability Variables (KPVs) in order to determine Key...

This study provides comprehensive descriptive evidence on the occurrence, size, and reporting by managers and the financial press of debt value adjustments due to a change in own credit risk (DVAs). The study is motivated by a public debate about DVAs in which critics describe them as...

For mitigating the problems of transfer pricing formula apportionment (FA) is discussedintensively. However, FA could even be more harmful than transfer pricing because incomeshifting would require changing economic decisions instead of just taking advantage ofaccounting options. We analyze the...

Dem Eigenkapital von Unternehmen kommt eine herausragende Bedeutung zu, weil es denUnternehmen Verfügungsmacht über Haftungspotentiale verschafft. Insbesondere gilt dies fürBanken, da sie eine zentrale Stellung in den Zahlungs- und Haftungsbeziehungen einerVolkswirtschaft einnehmen und die...

The German Commercial Code ("HGB") allows banks to build visible reserves for general banking risks according to section 340g HGB. These "GBR reserves" may, in addition to their risk provisioning function, be used to enhance capital endowment, for internal financing, signaling or earnings...

Section 340f of the German Commercial Code allows banks to provision against the special risks inherent to the banking business by building hidden reserves. Beyond risk provisioning, these reserves are implicitly accepted as an earnings management device. By analyzing financial statements of...