Hands in the cookie jar: Exploiting loan loss provisions under bank financial distress

El Diri, Malek, King, Timothy, Spokeviciute, Laima, Williams, Jonathan (2021) Hands in the cookie jar: Exploiting loan loss provisions under bank financial distress. Economics Letters, . p. 110098. ISSN 0165-1765. (doi:10.1016/j.econlet.2021.110098) (KAR id:90833)

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Official URL: https://doi.org/10.1016/j.econlet.2021.110098

Abstract

We investigate earnings management (EM) behaviour at failed banks by examining the

intensity and direction of EM around FDIC-insured commercial bank failures. Our empirical

analysis indicates that failing banks engage in EM to a significantly greater extent than nonfailing banks. Our results show that failing banks’ discretion over loan loss provisions ranges

from aggressive (upwards EM) to conservative (downwards EM).

Item Type:	Article
DOI/Identification number:	10.1016/j.econlet.2021.110098
Uncontrolled keywords:	Earnings Management, Bank Failures, Banks
Subjects:	H Social Sciences > HJ Public Finance
Divisions:	Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User:	Timothy King
Date Deposited:	13 Oct 2021 10:55 UTC
Last Modified:	09 Dec 2022 05:05 UTC
Resource URI:	https://kar.kent.ac.uk/id/eprint/90833 (The current URI for this page, for reference purposes)

University of Kent Author Information

King, Timothy.

Creator's ORCID:	https://orcid.org/0000-0002-7326-2162
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