The effects of regulatory and contracting costs on banks’ choice of accounting method for other postretirement employee benefits

Organized labor and information asymmetry in the financial markets

“…Data are retrieved from the Trade and Quote (TAQ), 16 IBES, Compustat and the Center for Research in Security Prices (CRSP) databases. Utilities (SIC code between 49 and 50) and firms from the financial sector (SIC code between 60 and 68) are excluded since they have different incentives (e.g., Beatty, Chamberlain, & Magliolo, 1995;Ramesh & Revsine, 2000). The sample is restricted to firms listed on the NYSE, AMEX or NASDAQ.…”

Joint accounting choices: an examination of firms’ adoption strategies for SFAS No. 106 AND SFAS No. 109

“…As mentioned previously, Ramesh and Revsine (2000) examine the same two standards in the context of one category of highly regulated firms, banks. They present evidence that the banks in their sample made adoption choices consistent with efforts to lower their regulatory and contracting costs.…”

“…Third, SFAS OPEB (106) was income decreasing, while SFAS DTAX (109) was income increasing for most firms. Ramesh and Revsine (2000) first took advantage of this unique setting by examining adoption choices for firms in the banking industry. We expand upon Ramesh and Revsine by extending our examination to all firms materially affected by the two standards, both regulated and non-regulated.…”

Fair Value Reclassifications of Financial Assets During the Financial Crisis

“…Several studies in this area examine loan-loss provisioning for capital management purposes and find systematic use of managerial discretion to avoid violations of regulatory capital restrictions (see Ryan, 2007, Chapter 5, for an overview). Ramesh and Revsine (2001) further document that incentives to raise regulatory capital affect the timing of U.S. banks' adoption of a new accounting rule for formerly unrecognized liabilities (SFAS 106). Skinner (2008) shows that -10 -deferred tax assets were substantially overstated by Japanese banks during the banking crisis in an effort to comply with regulatory capital requirements.…”