Empirical Examination of Quantitative Easing in Monetary Policy and Earning Management of Financial Markets and Institutions

<p>In the first chapter, I analyze the impact of changes in aggregate holding in special asset purchase programs by Federal Reserve Systems (FED) as an alternate monetary policy at aggregate level. Later, to complement the analysis of monetary impact at aggregate level, I also analyze the impact of monetary actions at bank stock level with a set of 186 banks. First, for the overall sample period, expected monetary shock has positive effect on bank stock return; however, unexpected shock component has otherwise negative impact. Second, during both conventional and QE regime, monetary shocks are not significant in explaining weekly stock returns; however change in FED’s total asset holding in special programs is significant during the QE regime and such findings are more robust for the “large” banks when compared to “medium” and “small” banks.</p> <p>The second chapter presents the second essay that is one of the early studies to analyze whether either the changes in accounting standard or the changes in prudential regulatory regimes may affect the bank earning management in terms of Loan Loss Provisioning (LLP) systematically. Results suggest that, in general, bank managers use LLP as a tool for earning management for income smoothing and also for capital management once LLP is allowed to be a part of Tier-I capital requirement. Both changes in prudential regulation from pro-cyclic to a dynamic regime and convergence of accounting standard from rule-based to principle-based standards have significant negative fixed effects separately and jointly once included.</p>

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics and Finance

Year

2013

Author dc:creator

• Ashraf, Ali

Contributors dc:contributor

• M. Kabir Hassan
• James R. Davis
• Gerald A. Whitney

• Financial Crises, Monetary Systems
• Government and the Monetary System
• Monetary Policy, Central Banks and Their Policies
• Finance and Financial Management

Repository record dc:identifier

https://scholarworks.uno.edu/td/1605

OAI identifier oai:identifier

oai:scholarworks.uno.edu:td-2653