Non-linear Dynamics in Discretionary Accruals: An Analysis of Bank Loan-Loss Provisions

Several studies have characterized the relation between discretionary accruals and earnings before-taxes to test for the existence of earnings smoothing behaviors. In this paper, we argue that the characteristic response of accruals to earnings is not linear, as the literature has shown. Instead, it is likely to be driven by non-linear patterns since both the incentives to manipulate earnings and the practical way to do so depend, in part, on the relative size of earnings. Using a sample of 9,442 US banks in the period 1999-2008, this paper shows that bank managers tend to use provisions as a smoothing devise when earnings are substantial ('cookie-jar' strategies), engage in earnings-decreasing strategies when losses are relatively large ('big-bath' accounting) and, most of the time, use provisions as an earnings-increasing tool. Hence, it is shown that nonlinear specifications are more informative with regard to the different strategies employed to manipulate earnings

Executive Compensation and Systemic Risk: The Role of Non-Interest Income and Wholesale Funding

This paper analyzes whether the excessive overreliance on non-interest income and wholesale funding, which occurred in the banking industry during the last two decades and led to increases in systemic risk, could arise from the desire of bank managers to increase their variable compensation. Using a sample of U.S. bank holding companies during 1995 to 2010, our results show that non-interest income is positively associated to a larger proportion of variable compensation. Also, while exercised options are more sensitive to income trading activities, bonuses tend to be related to the revenues originated from investment banking and venture capital activities. Similarly, a greater reliance on short-term wholesale funding positively associates with higher levels of variable compensation and bonuses. After the financial crisis, variable compensation and bonuses increased with non-interest income, but decreased with the use of short-term wholesale funding

Twitter as a Tool for Teaching and Communicating Microbiology: The #microMOOCSEM Initiative

Online social networks are increasingly used by the population on a daily basis. They are considered a powerful tool for science communication and their potential as educational tools is emerging. However, their usefulness in academic practice is still a matter of debate. Here, we present the results of our pioneering experience teaching a full Basic Microbiology course via Twitter (#microMOOCSEM), consisting of 28 lessons of 40-45 minutes duration each, at a tweet per minute rate during 10 weeks. Lessons were prepared by 30 different lecturers, covering most basic areas in Microbiology and some monographic topics of general interest (malaria, HIV, tuberculosis, etc.). Data analysis on the impact and acceptance of the course were largely affirmative, promoting a 330% enhancement in the followers and a >350-fold increase of the number of visits per month to the Twitter account of the host institution, the Spanish Society for Microbiology. Almost one third of the course followers were located overseas. Our study indicates that Massive Online Open Courses (MOOC) via Twitter are highly dynamic, interactive, and accessible to great audiences, providing a valuable tool for social learning and communicating science. This strategy attracts the interest of students towards particular topics in the field, efficiently complementing customary academic activities, especially in multidisciplinary areas like Microbiology.Versión del edito

RICORS2040 : The need for collaborative research in chronic kidney disease

Chronic kidney disease (CKD) is a silent and poorly known killer. The current concept of CKD is relatively young and uptake by the public, physicians and health authorities is not widespread. Physicians still confuse CKD with chronic kidney insufficiency or failure. For the wider public and health authorities, CKD evokes kidney replacement therapy (KRT). In Spain, the prevalence of KRT is 0.13%. Thus health authorities may consider CKD a non-issue: very few persons eventually need KRT and, for those in whom kidneys fail, the problem is 'solved' by dialysis or kidney transplantation. However, KRT is the tip of the iceberg in the burden of CKD. The main burden of CKD is accelerated ageing and premature death. The cut-off points for kidney function and kidney damage indexes that define CKD also mark an increased risk for all-cause premature death. CKD is the most prevalent risk factor for lethal coronavirus disease 2019 (COVID-19) and the factor that most increases the risk of death in COVID-19, after old age. Men and women undergoing KRT still have an annual mortality that is 10- to 100-fold higher than similar-age peers, and life expectancy is shortened by ~40 years for young persons on dialysis and by 15 years for young persons with a functioning kidney graft. CKD is expected to become the fifth greatest global cause of death by 2040 and the second greatest cause of death in Spain before the end of the century, a time when one in four Spaniards will have CKD. However, by 2022, CKD will become the only top-15 global predicted cause of death that is not supported by a dedicated well-funded Centres for Biomedical Research (CIBER) network structure in Spain. Realizing the underestimation of the CKD burden of disease by health authorities, the Decade of the Kidney initiative for 2020-2030 was launched by the American Association of Kidney Patients and the European Kidney Health Alliance. Leading Spanish kidney researchers grouped in the kidney collaborative research network Red de Investigación Renal have now applied for the Redes de Investigación Cooperativa Orientadas a Resultados en Salud (RICORS) call for collaborative research in Spain with the support of the Spanish Society of Nephrology, Federación Nacional de Asociaciones para la Lucha Contra las Enfermedades del Riñón and ONT: RICORS2040 aims to prevent the dire predictions for the global 2040 burden of CKD from becoming true

Non-linear Dynamics in Discretionary Accruals: An Analysis of Bank Loan-Loss Provisions

Several studies have characterized the relation between discretionary accruals and earnings before-taxes to test for the existence of earnings smoothing behaviors. In this paper, we argue that the characteristic response of accruals to earnings is not linear, as the literature has shown. Instead, it is likely to be driven by non-linear patterns since both the incentives to manipulate earnings and the practical way to do so depend, in part, on the relative size of earnings. Using a sample of 9,442 US banks in the period 1999-2008, this paper shows that bank managers tend to use provisions as a smoothing devise when earnings are substantial ('cookie-jar' strategies), engage in earnings-decreasing strategies when losses are relatively large ('big-bath' accounting) and, most of the time, use provisions as an earnings-increasing tool. Hence, it is shown that nonlinear specifications are more informative with regard to the different strategies employed to manipulate earnings

Executive Compensation and Systemic Risk: The Role of Non-Interest Income and Wholesale Funding

This paper analyzes whether the excessive overreliance on non-interest income and wholesale funding, which occurred in the banking industry during the last two decades and led to increases in systemic risk, could arise from the desire of bank managers to increase their variable compensation. Using a sample of U.S. bank holding companies during 1995 to 2010, our results show that non-interest income is positively associated to a larger proportion of variable compensation. Also, while exercised options are more sensitive to income trading activities, bonuses tend to be related to the revenues originated from investment banking and venture capital activities. Similarly, a greater reliance on short-term wholesale funding positively associates with higher levels of variable compensation and bonuses. After the financial crisis, variable compensation and bonuses increased with non-interest income, but decreased with the use of short-term wholesale funding