Adoption of IAS/IFRS, liquidity constraints, and credit rationing: the case of the European banking industry

Abstract : With imperfections, theory suggests that banks dependent on external resources have greater difficulty refinancing their lending than banks with a lot of internal resources. Hence, there is an increased risk of credit rationing to these institutions. In this context, this empirical study tests the hypothesis that the adoption of the IAS/IFRS, deemed as of superior quality for economic decision-making, results in an increase in the amount of credit offered by banks with liquidity constraints. For a sample of European banks over the period of 2003 to 2008, we find that results are only partly consistent with this hypothesis. The results depend on the measure of the constraint, the bank size, and the enforcement regime. Our results show that the adoption (both voluntary and mandatory) of the IAS/IFRS lead to an increase in the credit supply only for small and constrained banks. These results are important with respect to the goal of banking stability and with the scarcity of credit observed in Europe since the financial crisis.
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Article dans une revue
Quarterly Review of Economics and Finance, Elsevier, 2016, 〈10.1016/j.qref.2016.05.001〉
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https://halshs.archives-ouvertes.fr/halshs-01321513
Contributeur : Herve Alexandre <>
Soumis le : mercredi 25 mai 2016 - 19:07:00
Dernière modification le : mercredi 28 septembre 2016 - 16:03:17

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Julien Clavier, Herve Alexandre. Adoption of IAS/IFRS, liquidity constraints, and credit rationing: the case of the European banking industry . Quarterly Review of Economics and Finance, Elsevier, 2016, 〈10.1016/j.qref.2016.05.001〉. 〈halshs-01321513〉

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