Loan-loss provisions, earnings management, and capital management by Russian banks: the impact of changes in banking regulation and oversight

Egor Nikulin, Jeff Downing

Результат исследований: Научные публикации в периодических изданияхстатьярецензирование

Аннотация

This paper compares earnings management (EM) and capital management (CM) by Russian banks before and after changes in banking regulation and oversight in Russia. In Russia, in recent years, the Central Bank of the Russian Federation has imposed new regulations on banks. In addition, the Central Bank has strengthened its oversight by revoking the license of a large number of banks. Hence, we compare EM and CM before and after these changes in regulation and oversight. We focus on the use of loan-loss provisions (LLPs) for EM and CM. We have three main results. First, we find that banks use LLPs for EM both before and after these changes in regulation and oversight. However, banks’ use of LLPs for EM is similar pre- and post-changes. Second, for the entire sample period, we find mixed evidence of the relationship between capital and LLPs. However, post-changes, the relationship between capital and LLPs is more negative relative to pre-changes. This result is consistent with stronger oversight by regulators post-changes. Third, the difference in CM post-changes relative to pre-changes is different for government-owned banks than for private banks.

Язык оригиналаанглийский
Число страниц19
ЖурналEurasian Business Review
Ранняя дата в режиме онлайн21 мая 2020
DOI
СостояниеОпубликовано - 2020

Предметные области Scopus

  • Экономика, эконометрия, и финансы (разное)
  • Бизнес, управление и бухгалтерский учет (все)

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