Income Smoothing Versus Market Discipline

Yasuo Nishiyama

《Advances in Financial Planning and Forecasting》 4期 (2011/03) Pp. 25-58

https://doi.org/10.6292/AFPF.2011.04.02

並列摘要

The main purpose of this paper is to analyze the behavior of income smoothing of large banks. The paper shows that banks engage in real income smoothing by lowering today's CD rates when a higher future loan default rate is expected to occur. This theoretical prediction is tested and supported empirically. More importantly, the results of this paper cast doubt on the ongoing argument for ”market discipline” advocated by bank analysts and regulators. Additional empirical results in this paper indicate that market assessments of banks' risk-taking reflected in CD yields (i.e., market discipline) appear to be not helpful for off-site bank surveillance.

並列關鍵字

Income smoothing ； Banks ； Risk aversion ； CD rate ； Market discipline

參考文獻

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