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International Variation in Bank Accounting Information Content

25 Pages Posted: 12 Sep 2008  

Ronald Zhao

Monmouth University - Department of Accounting & Business Law

Daniel He

Monmouth University

Abstract

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.

Suggested Citation

Zhao, Ronald and He, Daniel, International Variation in Bank Accounting Information Content. Journal of International Financial Management & Accounting, Vol. 19, No. 3, pp. 236-260, Autumn 2008. Available at SSRN: https://ssrn.com/abstract=1266944 or http://dx.doi.org/10.1111/j.1467-646X.2008.01023.x

Ronald Zhao (Contact Author)

Monmouth University - Department of Accounting & Business Law ( email )

West Long Branch, NJ 07764
United States
732-571-3629 (Phone)

Daniel He

Monmouth University ( email )

400 Cedar Ave
West Long Branch, NJ 07764
United States

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