Loan, security, and dividend choices by individual (unconsolidated) public and private commercial banks

First Financial Restructuring and operating efficiency: Evidence from Taiwanese commercial banks

“…Consistent with this notion, the FFR imposed a minimum level of 8% capital adequacy in an effort to stabilize the financial system and to prevent losses (Barth et al, 2004). The rationale for this capital adequacy requirement is provided by Das and Ghosh (2006) who document a positive relationship between banking efficiency and capital adequacy and Niswander and Swanson (2000) find that banks with substandard or marginal capital adequacy ratios have higher operating costs. These results are consistent with the notion that well-capitalized banks are perceived to be relatively safe and have better credit risk management practices, which in turn lowers their cost of borrowing, leading to enhanced efficiency.…”

Earnings versus capital ratios management: role of bank types and SFAS 114

“…Furthermore, prior research suggests that larger firms are associated with larger agency problems (Gabor 1985), suggesting that the firm size plays an important role in managerial decisions. Based on these arguments, we expect the large publicly traded banks to manage reported earnings more than the small banks (also see Beatty et al 2002;Niswander and Swanson 2000). This expectation is tested on the following hypothesis: H1: LLP is positively associated with EBTP (earnings before taxes and provisions for LLP) and the positive association is stronger for large banks than small banks.…”

“…Bhatt 1996;Kim and Kross 1998;Greenawalt and Sinkey 1988;Niswander and Swanson 2000;Beatty et al 2002). In order to have a better insight into the association between LLP and earnings, Wahlen (1994) differentiated between discretionary and non-discretionary components of LLP, and find that the discretionary component is positively associated with current pre-LLP earnings.…”

Analysis Earning Management Practice: Approach Discretionary Loss Loan Provision (Case Study of Islamic Banks di Indonesia tahun 2011-2016)

“…Likewise, Niswander and Swanson [7], using call report data, financial reporting the Loan Provision portion was approved by the level of bank capital, income, and tax. In a sample of 11,000 banks, they show that banks below the capital adequacy threshold often make discretionary choices that reduce income and capital.…”