دانلود رایگان مقاله انگلیسی مدیریت درآمدهای بانکی و هموارسازی درآمدها با استفاده از درآمد کمیسیون و دستمزد - امرالد 2017

Abstract

Purpose – The purpose of this paper is to investigate whether European banks use commission and fee income (CF) to smooth reported earnings or to persistently increase reported earnings as an income-increasing earnings management strategy. Design/methodology/approach – The author tests the income-smoothing hypothesis following the approach of Stubben (2010) and Ahmed et al. (1999). Findings – The author finds that European banks use CF to smooth reported earnings and this behaviour is pronounced among non-too-big-to-fail (NTBTF) European banks compared to too-big-to-fail (TBTF) European banks. The author also finds a positive and significant correlation between interest income and non-interest income (CF) indicating increased systematic risk due to reduced diversification benefits. The author also finds that the CF of NTBTF banks is procyclical with fluctuating economic conditions but not for TBTF banks. Also, the author finds evidence for income-increasing earnings management in the post-crisis period, for larger European banks and when banks have higher ex post interest income, implying that the propensity to engage in income-increasing earnings management significantly depends on bank size and ex post interest margin considerations. The findings have policy implications. Originality/value – The author examines alternative financial numbers that banks use to manage earnings. The author focusses on income smoothing via CF among European banks, a context that has not been explored in the literature.

6. Conclusion

This study examines whether European banks use CF for earnings management purposes. I focus on two types of earnings management strategy: income-smoothing or income-increasing earnings management by examining the statistical relationship between CF and EBCF. I find that European banks use CF to smooth earnings so that earnings are never too high or too low and this behaviour is more pronounced among NTBTF European banks compared to TBTF European banks. I also find that the CF of NTBTF banks is procyclical with fluctuating economic conditions but not for TBTF banks. Also, I find evidence for income-increasing earnings management during the post-crisis period for larger European banks and when ex post interest income levels are taken into account. Therefore, I conclude that the propensity for European banks to use CF to engage in income-increasing earnings management significantly depends on bank size and ex post interest margin considerations.

Finally, bank regulators and policy researchers in Europe should be aware that the income generated from non-interest activities are rather used to manipulate reported earnings as an income-increasing or income-smoothing strategy. With regard to the income diversification debate, the findings of this study contribute to the diversification debate and support the argument that non-interest income yields lower diversification benefits to European banks and increase bank (systematic) risk. Therefore, bank regulators in Europe should be aware that European banks’ reliance on non-interest income increases bank risk rather than reducing risk.