Using a relatively large sample of European and US banks for the period 1998-2016, we investigate the determinants of bank dividend smoothing based on agency, asymmetric information and risk-shifting theories. We show that dividend payout ratio smoothing practices were implemented on both continents before and after the crisis of 2007 and were more strongly pronounced for EU banks. Our findings mostly support agency-based explanations of bank dividend behavior as evidenced by higher payout ratio smoothing for banks with higher (initial) dividend payouts, lower ownership concentration, public banks, and banks with lower growth opportunities and weaker investor protection. Evidence in favor of asymmetric information explanations is stronger for EU countries, where smaller (more opaque) banks appear to smooth more. In both continents, banks that rely more heavily on equity issuances are found to smooth dividend payout ratios more, suggesting that banks aim at improving access to equity markets. We also provide evidence in support of risk-shifting, as evidenced by the persistence of dividend payout ratio smoothing in the crisis years and higher dividend smoothing for banks under greater regulatory pressure.Additional analysis using a time series partial adjustment model for dividend levels provides evidence supporting the prevalence of dividend smoothing and the suggested theoretical explanations. K E Y W O R D Sagency, asymmetric information, bank dividend policy, bank regulation, legal origin, risk-shifting

We investigate the relation of recognized intangibles, defined as acquired intangibles net of goodwill, and the market's perception of firm growth options (PVGO). We find that: (a) on average recognized intangibles are positively associated with PVGO after controlling for intangible expenditures immediately expensed, firm specific characteristics, industry membership and systematic risk (b) the said relation is highly non-linear (negatively skewed) and more strongly pronounced in companies with lower accumulation of R&D Capital; recognized intangibles are not that significant at higher levels of PVGO and whereas firms have committed to in-house technological development, and (c) while adjusted levels of recognized intangibles increase approximately tenfold over the last 35 years their explanatory power to PVGO over the period generally wanes. Our results are informative for the interpretation of recognized intangibles as a summary balance sheet item and therefore useful to users of financial statements forming investment and credit decisions, to policy makers aiming at stimulating firm growth and to standard setters aiming at improving value relevance.

We look into the role of financial intermediation in inducing the European financial crisis of 2008 by exploring the effects of overall lending, and the allocation of credit to specific categories of borrowers, namely households vs. firms. We find that for the EU26 during the period 1995-2008, excessive household leverage through mortgage lending exerted a "crowdingout" effect on availability of credit to support innovation and productive investment. The crowding out effect ultimately translated into a GDP growth that was decoupled from real household income. In this article we explain that shifting credit towards mortgages and away from corporate projects is consistent with rational behaviour based on historical trends aimed at minimizing short-term risk for each individual bank. Nevertheless, as a whole, the sum of individual risk-reducing attitudes generated a long-term systemic risk.

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