No abstract

Since 2005, European-listed companies have been required to prepare their consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). We examine whether value relevance increased following the introduction of IFRS, using a sample of 3,721 companies listed on five European stock exchanges: Frankfurt, Madrid, Paris, London, and Milan. We find mixed evidence of an increase in value relevance. However, the influence of earnings on share price increased following the introduction of IFRS in Germany, France, and the United Kingdom, while the influence of book value of equity decreased (except for the United Kingdom).

No abstract

In nonfinancial firms, higher risk taking results in lower dividend payout ratios. In banking, public guarantees may result in a positive relation between dividend payout ratios and risk taking. I investigate the interplay between dividend payout ratios and bank risk-taking allowing for the effect of charter values and capital adequacy regulation. I find a positive relation between bank risk-taking and dividend payout ratios. Proximity to the required capital ratio and a high charter value reduce the impact of bank risk-taking on the dividend payout ratio. My results are robust to different proxies for the dividend payout ratio and bank risk-taking.