Prudential regulation and financial information in Spanish banks: 1995–2015

Marín, Salvador; Gras, Ester; Martínez, Esther Ortiz

doi:10.1080/02102412.2019.1608696

Cited by 6 publications

(7 citation statements)

References 41 publications

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“…Financial services companies are vital agents in the economy, so they are a benchmark for greater transparency [31][32][33]. They are also under special supervision and regulation in each country, with specific requirements on top of those applied for nonfinancial entities [34], and there can be an effect of the type of market economy on banks´disclosure (coordinated or liberal market economy) [35]. This vital activity and the effects of the recent crisis have increased research on the relationship between social responsibility and profitability in financial services companies and companies operating in other sectors [36][37][38][39][40][41][42][43].…”

Section: Introductionmentioning

confidence: 99%

European Financial Services SMEs: Language in Their Sustainability Reporting

Martínez

Marín‐Hernández

2020

Sustainability

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In this study we concentrate on the segment of small companies in the financial sector in Europe. Services in this sector are developing rapidly and are not necessarily provided only by traditional banks and financial companies. Many nonfinancial companies provide financial services, and this may open the sector to additional risk. In this context, the aspects of both financial and nonfinancial reporting are important and need to be taken into consideration as a whole to provide a complex picture of a particular institution. The goal of this paper is to analyze sustainability reporting according to the Global Reporting Initiative (GRI) by European financial services small and medium-sized enterprises (SMEs). First, we conducted a descriptive analysis of the features of nonfinancial information and its assurance, studying a sample of all European SMEs reporting according to the GRI from 2016 to 2018. Then, we chose only financial services SMEs to apply lexical analysis to their narrative reporting based on a corpus of 102,056 words. We conclude that nonfinancial information does not have the same importance as traditional financial information, and this sustainability reporting only complies with the minimum requirements. Thus, there is still a long way to go in this field.

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Section: Introductionmentioning

confidence: 99%

European Financial Services SMEs: Language in Their Sustainability Reporting

Martínez

Marín‐Hernández

2020

Sustainability

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“…Regarding provisions, Annex IX of Circular 4/ 2004 (Banco de España, 2004) contemplates a schedule of provisions for assets with a default of more than three months and 100% coverage of the risk after 12 months of default, which could mean having a certain similarity to the model established in IAS 39. However, prudential criteria prevail over accounting criteria in guaranteeing financial system stability (Mar ın et al, 2019). The Bank of Spain Circular 4/2004 and its traditional impairment model are incompatible with the incurred loss model of IAS 39, which generates adjustments in the preparation of consolidated accounts.…”

Section: Theoretical Background 21 Impairment Model Under Ifrs Perspe...mentioning

confidence: 99%

Income smoothing management and loan loss provisions in the banking system

Gómez-Ortega,

Licerán-Gutiérrez,

Horno-Bueno

2023

JRF

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PurposeThe “public interest” of financial institutions was used as an argument to intervene in accounting practices. The Bank of Spain's standard was not compatible with International Accounting Standard (henceforth IAS) 39 and the Spanish banking sector had become one of the most provisioned in Europe. This makes it an interesting case study of the relationship between provisioning and income smoothing. The 2008 financial crisis revealed that provisions were insufficient and a reinforcement regulation process began in 2012. This paper aims to examine whether, since 2012, the Bank of Spain's regulatory effort on impairment accounting standards has induced less income smoothing, correcting its countercyclical effect.Design/methodology/approachA regression model is applied during the period 2005–2020, to test whether there is a trend change in the correlation between the level of provisions and annual earnings in 2012.FindingsThe results show that from 2012 onwards (when the Bank of Spain reinforced the regulation on provisioning), there was a correction in income smoothing behaviour.Originality/valueThis study provides empirical evidence that reinforces the claim that accounting policy can affect decision-making accounting practices, in this particular case, at the Bank of Spain.

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“…Determine the nature and quality of the information produced by the entity ("IPE") and how the auditor plans to obtain audit evidence of its completeness and accuracy. taken a more prudential approach in its circulars to foster financial stability (Mar ın et al, 2019).…”

Section: Classification and Measurementmentioning

confidence: 99%

“…The circulars of the Bank of Spain have been adopted in a way, that is somewhat anticipated, the premises of the new rules preparing the banking system to comply with them. However, although it has always been within the framework of compliance; the regulator has always taken a more prudential approach in its circulars to foster financial stability (Marín et al. , 2019).…”

Section: The Actual Implementation Of the Standard And The Enforcemen...mentioning

confidence: 99%

Impact of the application of IFRS 9 on listed Spanish credit institutions: implications from the regulatory, supervisory and auditing point of view

Gómez-Ortega

Gelashvili

Jalón

et al. 2022

JRF

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PurposeAt the European level, on January 1st 2018, the accounting standard IFRS 9, on the principles for the accounting information of financial instruments entered into force. The objective of this research paper is to analyse the impact of the first application of IFRS 9 on the credit institutions listed in Spain, specifically, its effects on their financial statements and the corresponding audit reports.Design/methodology/approachIn order to achieve research purpose, a descriptive analysis of the analysed entities has been carried out, through the financial and economic indicators, and through the review of the corresponding audit reports.FindingsThe results show that the application of IFRS 9 had a significant effect (both positive and negative) on the results of the subject companies. Based on the audit reports, the application of this new standard increased the degree of complexity and that of accounting estimates in the financial statements.Originality/valueThis research is an important contribution to the literature on this topic because it analyses the impact of IFRS 9 under the main points of view that allow for a more complete understanding of the standard thus addressing the regulatory accounting standpoint, the economic–financial impact and the consequences on the implementation process.

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Prudential regulation and financial information in Spanish banks: 1995–2015

Cited by 6 publications

References 41 publications

European Financial Services SMEs: Language in Their Sustainability Reporting

European Financial Services SMEs: Language in Their Sustainability Reporting

Income smoothing management and loan loss provisions in the banking system

Impact of the application of IFRS 9 on listed Spanish credit institutions: implications from the regulatory, supervisory and auditing point of view

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