The Implementation of the IFRS 9 in Banking Industry

Jean-François Casta, Christophe Lejard and Eric Paget-Blanc ()
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Jean-François Casta: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Christophe Lejard: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier
Eric Paget-Blanc: LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], UEVE - Université d'Évry-Val-d'Essonne

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Abstract: This study addreses a first post-implementation review of the IFRS 9. Precisely, I focus on short-term effects generated by the standard, i.e. a decline of retained earnings and other equity reserves mainly due to the implementaton of the expected losses-based provisionning model, and how did banks accomodate their accountng policy to mitigate those unfavorable effects. By using a sample of 56 EU publicly listed banks, I found banks have incentive to decrease (increase )their level of discrenationnary loanloss provisions when unfavorable impact on retained earnings is higher (lower), supporting the income smoothing hypothesis. In addition, obtained results do not verify the capital management hypothesis.

Keywords: Income smoothing; Expected Credit Loss; Capital management (search for similar items in EconPapers)
Date: 2019-08-29
Note: View the original document on HAL open archive server: https://hal.science/hal-02405140v1
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Citations: View citations in EconPapers (1)

Published in EUFIN 2019 : The 15th Workshop on European Financial Reporting, Aug 2019, Vienne, Austria

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02405140

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