Country Creditor Rights, Information Sharing, and Commercial Banks’ Profitability

The authors analyze commercial banks’ profitability (return on equity, ROE) at different levels of creditor rights and an aggregate score of information sharing in terms of credit bureaus. After controlling for bank size and some macroeconomic variables, the results indicate that profitability is higher and more persistent when creditors are well protected. Furthermore, the presence of a (public or private) credit bureau increases the persistence of ROE, but higher levels of information sharing foster competition and erode future profitability.return on equity (ROE), commercial banks, creditor rights, information sharing, predictive ability of accounting

Estimación de niveles y cambios de rentabilidad futura: el efecto de la posición relativa de la empresa en su sector y la desagregación de la rentabilidad en operativa y financiera

[EN] In this paper we examine how the relative position of a firm’s Return on Equity (ROE) in industries affectsthe predictability of the next-year ROE levels, and the ROE changes from year to year. Using Nissimand Penman breakdown into operating and financing drivers, the significant role of the industry factoris established, although changes in signs suggest subtle non-linear relations in the drivers. Our studyavoids problems originating from negative signs by analyzing sorts and by making new regressions withdisaggregated second-order drivers by signs. This way, our results provide evidence of some differentpatterns in the influence of the first-level drivers of ROE (the operating factor and the financing factor), andthe second-level drivers (profit margin, asset turnover, leverage and return spread) on future profitability,depending on the industry spread. The results on the role of contextual factors to improve the estimationof future profitability remain consistent for small and large firms, although adding some nuances.[ES] En este trabajo examinamos si la posición relativa del ROE de la empresa en el sector afecta a la estimación del nivel de ROE en el año posterior, y a la estimación de su variación. Empleando el desglose operativo-financiero de Nissim y Penman, encontramos que el factor sectorial es significativo, aunque las variaciones de los signos sugieren la presencia de relaciones no lineales. Nuestro trabajo evita los problemas generados por los signos negativos en los ratios al emplear cuantiles y realizar regresiones independientes para los diferentes signos que toman las variables. De esta forma, los resultados muestran diferentes patrones en el impacto de los inductores del ROE de primer nivel (los factores operativo y financiero) y de segundo nivel (margen de resultados, rotaciones de los activos, endeudamiento y diferencial de rentabilidad) sobre la rentabilidad futura, dependiendo del diferencial de rentabilidad con respecto al sector. Estos resultados, con alguna matización, se vuelven a encontrar cuando se controla por tamaño diferenciando entre empresas pequeñas y grandes.SIThis research is funded by the ECO2011-29144-C03-01 researchproject of the Spanish Ministry of Science and Innovation, and theULE2012-1 research project of the University of Leon

Financial Information effects on the measurement of Commercial Banks` Efficiency

[EN] Using Stochastic Frontier Analysis (SFA) in a sample of commercial banks from 107 countries for the period 1996-2003, we obtain a mean cost efficiency score of 0,84, which supports the evidence found in other works, suggesting an improvement of efficiency scores over the ones obtained in the previous decade. Adding some data on the financial information framework (Bank Regulation and supervision Database), our study shows that financial information rules produce significant bias in reported efficiency. Following less conservative standards, IAS or USGAAP, banks show lower levels of efficiency than banks in countries with more conservative standards. Also, in countries where disclosure of risk management policies is mandatory, banks seem to be less efficient

Country Creditor Rights, Information Sharing and Commercial Banks Profitability Persistence across the world

[EN] We analyze the persistence of commercial banks’ profitability (Return on Equity, ROE) in different levels of creditor rights and an aggregate score of information sharing in terms of credit bureaus. After controlling for bank size and some macroeconomic variables, the results indicate that permanent profitability tend to disappear while profitability persistence is higher when creditors are well protected. Furthermore, the presence of a credit bureau (public or private) increases the persistence of ROE, but higher levels of information sharing foster competition and erode future profitability

El nuevo estado de flujos de efectivo: ¿más información implica mayor utilidad para el usuario?

[ES] Información y conocimiento no son términos sinónimos. Para que una mayor cantidad de información se transforme en un incremento del conocimiento, es necesario que se comprenda y se integre en un conjunto organizado orientado a un fin, ya sea este la toma de decisiones de un inversor o la valoración del negocio de una empresa.S

Does Debt Concentration Depend on the Risk-Taking Incentives in CEO Compensation?

[EN] Coordination problems amongst creditors are reduced when a firm’s debt structure is concentrated in fewer debt types. Using a sample of US non-financial firms, we show that an increase in risktaking incentives in CEO pay is associated with a greater debt concentration by debt type. This result holds in various settings that account for endogeneity and is primarily driven by pay incentives embedded in vested options that are expected to favor business choices with more immediate negative effects on debtholders’ wealth. Further, our findings are stronger for firms with a higher default risk where coordinated efforts amongst creditors become more pressing. A final test documents that a more concentrated debt structure reduces the negative influence of CEO risk-taking incentives on debtholder wealth thus highlighting the advantages of lower coordination problems amongst creditors

Low interest rates and executive risk-taking incentives: Evidence from the United States

[EN] This article contributes to the literature by indicating how certain monetary policies impact the compensation incentives of US managers to adopt riskier business policies. Specifically, based on the agency problems between shareholders and managers and between shareholders and creditors, a research framework is developed to identify the influence of low interest rates on managers’ risk-taking incentives proxied by the sensitivity of executive compensation to stock return volatility (Vega). We examine 1,293 firms in the United States between 2000 and 2016, and the results indicate that low interest rates increase the managers’ short-term risk-taking incentives and that those incentives contribute to the risk effectively taken by the firm. Our results are robust to the use of alternative monetary proxies and to the presence of passive versus active institutional shareholders.SIThe authors thank financial support from the University of Leon (ULE2012-1). Paula Castro also acknowledges the Grant FPU (AP2012-1959) from the Spanish Ministry of Education, Culture and Sport

Propuesta para el desarrollo de competencias transversales en la licenciatura en Ciencias Actuariales y Financieras: análisis de artículos científicos

[ES] Con este trabajo pretendemos explicar la experiencia llevada a cabo en la asignatura optativa “Mercado de Valores” (Licenciatura en Ciencias Actuariales y Financieras, Universidad de Extremadura) durante el curso académico 2005/2006, con el objeto de desarrollar las capacidades transversales en Técnicas de Comunicación, Conocimiento de Idiomas, así como las relacionadas con las Finanzas y los Mercados Financieros. Para ello, mostramos el desarrollo de dos actividades consistentes en analizar y presentar, de forma individual y en grupo, dos artículos científicos, en lengua inglesa, que versan sobre aspectos relacionados con la materia impartida

Aspectos económicos de la política ambiental

Parte I: Conocimientos básicos para alumnos[ES] En la actualidad la sostenibilidad cada vez tiene un mayor peso en diferentes ámbitos como la regulación, la energía, los procesos de producción, el diseño de productos, los medios de transporte, y, en consecuencia, las formas de producción, los estilos de consumo y el comportamiento de la sociedad. Por ello, el cambio climático se plantea como el reto más duro al que se enfrenta nuestro planeta durante este siglo. Los científicos atribuyen este proceso (al menos en una parte sustancial) al incremento continuado desde mediados del siglo XVIII en la concentración atmosférica de Gases de Efecto Invernadero (GEI). En este escenario, las políticas ambientales públicas sobre los efectos del cambio climático están avanzando de forma vertiginosa