Abstract
The paper examines how the Statutory Audit and Corporate Reporting Directives (SACORD) affect the compliance costs, risk taking and quality of financial reporting of the EU banks. Using a natural experiment, we find that post SACORD, both compliance costs and risk taking increase significantly. However, the implementation of additional regulations seems to be effective in terms of improved quality of financial reporting. When we analyse the impact by size, we find that smaller banks face disproportionately higher increase in compliance costs while larger banks seem to engage in greater risk taking.
| Original language | English |
|---|---|
| Article number | 101431 |
| Number of pages | 50 |
| Journal | International Review of Financial Analysis |
| Volume | 68 |
| Early online date | 14 Dec 2019 |
| DOIs | |
| Publication status | Published - 1 Mar 2020 |
Bibliographical note
NOTICE: this is the author’s version of a work that was accepted for publication in International Review of Financial Analysis. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Review of Financial Analysis, 68 (2020)DOI: 10.1016/j.irfa.2019.101431
© 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Keywords
- Financial regulation
- Transparency
- Financial system
- Financial stability
- Difference-in-differences
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)