EconPapers    
Economics at your fingertips  
 

Adoption of IAS/IFRS, liquidity constraints, and credit rationing: The case of the European banking industry

Hervé Alexandre () and Julien Clavier

The Quarterly Review of Economics and Finance, 2017, vol. 63, issue C, 249-258

Abstract: With imperfections, theory suggests that banks dependent on external resources have greater difficulty refinancing their lending than banks with a lot of internal resources. Hence, there is an increased risk of credit rationing to these institutions. In this context, this empirical study tests the hypothesis that the adoption of the IAS/IFRS, deemed as of superior quality for economic decision-making, results in an increase in the amount of credit offered by banks with liquidity constraints. For a sample of European banks over the period of 2003–2008, we find that results are only partly consistent with this hypothesis. The results depend on the measure of the constraint, the bank size, and the enforcement regime. Our results show that the adoption (both voluntary and mandatory) of the IAS/IFRS lead to an increase in the credit supply only for small and constrained banks. These results are important with respect to the goal of banking stability and with the scarcity of credit observed in Europe since the financial crisis.

Keywords: Banks; IAS/IFRS; Liquidity; Credit rationing (search for similar items in EconPapers)
JEL-codes: G21 M41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976916300254
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Adoption of IAS/IFRS, liquidity constraints, and credit rationing: the case of the European banking industry (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:63:y:2017:i:c:p:249-258

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-09-26
Handle: RePEc:eee:quaeco:v:63:y:2017:i:c:p:249-258