Hands in the cookie jar: exploiting loan loss provisions under bank financial distress

El Diri, Malek, King, Timothy, Spokeviciute, Laima ORCID: https://orcid.org/0000-0002-6563-5790 and Williams, Jonathan 2021. Hands in the cookie jar: exploiting loan loss provisions under bank financial distress. Economics Letters 209 , 110098. 10.1016/j.econlet.2021.110098

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Abstract

We investigate earnings management (EM) behaviour at failed banks by examining the intensity and direction of EM around FDIC-insured commercial bank failures. Our empirical analysis indicates that failing banks engage in EM to a significantly greater extent than non-failing banks. Our results show that failing banks’ discretion over loan loss provisions ranges from aggressive (upwards EM) to conservative (downwards EM).

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	0165-1765
Date of First Compliant Deposit:	27 January 2022
Date of Acceptance:	1 October 2021
Last Modified:	21 Nov 2024 14:15
URI:	https://orca.cardiff.ac.uk/id/eprint/146804

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