Journal of Financial Stability Vol. 49 2020
Is accounting enforcement related to risk-taking in the banking industry?
open access
Abstract
Using a sample of banks from 36 countries, we document that accounting enforcement is negatively related to bank risk-taking. We also provide evidence that accounting enforcement enhances bank stability during the crisis. In addition, we show that banks assume less risk through more conservative lending decisions and a reduction in complexity in jurisdictions with higher accounting enforcement. Our results show that formal institutions such as accounting enforcement are associated with bank financial decisions and risk-taking behavior.
- DOI
- 10.1016/j.jfs.2020.100758
- Volume
- 49
- Pages
- 100758
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref