Does IFRS 9 Increase Banks’ Resilience?

Kund, Arndt-Gerrit; Rugilo, Daniel

doi:10.2139/ssrn.4376699

Cited by 2 publications

(3 citation statements)

References 30 publications

(48 reference statements)

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“…The estimations are conducted at the bank-year level for an unbalanced panel of over 3,000 banks across 168 countries comprising advanced and emerging economies. This contrasts with prior research which focuses either on a limited sample of countries and banks (Dong and Oberson, 2021;Kim et al, 2020;Lopez-Espinosa et al, 2021;Pastiranov a and Witzany, 2022;Kund and Rugilo, 2023;Kyiu and Tawiah, 2023;Salazar et al, 2023) or have a within-country focus (Miah et al, 2018;Sharairi, 2018;Coffie and Bedi, 2019;Mardani et al, 2019;Gu, 2021).…”

Section: Introductionmentioning

confidence: 79%

“…, 2020; Lopez-Espinosa et al. , 2021; Pastiranová and Witzany, 2022; Kund and Rugilo, 2023; Kyiu and Tawiah, 2023; Salazar et al. , 2023) or have a within-country focus (Miah et al.…”

Section: Introductionmentioning

confidence: 99%

“…Accordingly, under IFRS-9, allowances are based on a 12-month ECL, provided there is no significant deterioration in credit risk (Stage 1). However, in case there is a significant deterioration in credit risk (Stage II) or the loan is “credit impaired” (Stage III), the approach requires allowances to be made on lifetime expected losses (see, for example, Kund and Rugilo, 2023). The assessment of a significant increase in credit risk for any loan varies by product and risk segment.…”

Section: Introductionmentioning

confidence: 99%

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IFRS-9, expected loan loss provisioning and bank liquidity creation: early evidence

Ghosh

2024

ARJ

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Purpose The relevance of both microeconomic and macroeconomic factors in driving banks’ liquidity creation within a cross-country setup has been addressed in prior research. The purpose of this study is to explore whether and how the recent International Financial Reporting Standards-9 (IFRS-9) accounting standards affect this relationship. Design/methodology/approach The author exploits the staggered implementation of IFRS-9 across countries and use a difference-in-differences framework to tease out the causal impact. Findings The findings indicate that the enactment of IFRS-9 leads to an increase in asset-side liquidity creation and a decline of broadly similar magnitude in liability-side liquidity creation. As a result, total liquidity creation remains unaltered. Disaggregatedly, the evidence shows that all the key channels on the asset and liability side are instrumental in explaining this behaviour. Originality/value The author views this as one of the early studies in a cross-country setup to explore the interlinkage between IFRS-9 and bank liquidity creation. Since liquidity creation measure provides a comprehensive metric of liquidity supplied by banks to the market, the study seeks to inform the policy debate on the role of these recently instituted accounting standards on bank liquidity behaviour.

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Section: Introductionmentioning

confidence: 79%

“…, 2020; Lopez-Espinosa et al. , 2021; Pastiranová and Witzany, 2022; Kund and Rugilo, 2023; Kyiu and Tawiah, 2023; Salazar et al. , 2023) or have a within-country focus (Miah et al.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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