International Variation in Bank Accounting Information Content
Monmouth University - Department of Accounting & Business Law
Journal of International Financial Management & Accounting, Vol. 19, No. 3, pp. 236-260, Autumn 2008
This study explores the cross-country impact of financial system and banking regulations on the information content of bank earnings and book value. Test results provide empirical evidence that financial system and banking regulations have a joint effect on the association of equity price with earnings and book value components in Germany, France, the United Kingdom and United States. This effect is explainable by the objective bank function, which shows that earnings of the period determine the terminal book value, thus consistent with the clean surplus accounting approach. Cross-country variation in bank accounting information content calls for caution in interpreting international bank financial and operating ratios.
Number of Pages in PDF File: 25
Date posted: September 12, 2008