Since its emergence in December 2019, there have been more than 20 million COVID-19 infections worldwide, with at least five million confirmed cases in the United States (Roser et al., 2020). Individuals and business entities suffered severe loss of revenues and disrupted supply chains due to industry shutdowns and restrictions on movement and commerce. Policymakers… Read More »
The Office of the Comptroller of the Currency (OCC) recently issued a proposed “true lender” rule.[1] The proposed rule would establish a two-part test for determining whether a national bank or federal savings association “makes a loan and is the ‘true lender’ in the context of a partnership between a bank and a third party,… Read More »
At this time, numerous initiatives are attempting to provide citizens with a digital form of central bank money, referred to as Central Bank Digital Currency (CBDC). CBDC promises many benefits for citizens, such as providing a risk-free means of payment, preserving monetary sovereignty in light of the growing usage of private cryptocurrencies, and strengthening the… Read More »
Earnings management is the use of accounting methods by managers to manipulate financial statements in order to inaccurately convey the financial performance of their company. Earnings management is costly to stakeholders and society because it decreases the informativeness of earnings thereby distorting the economic efficiency of the stock market. Moreover, earnings management can also potentially… Read More »
COVID-19 is primarily a health and human crisis which has evolved into an ever expanding economic crisis, but not yet a large scale financial crisis. So far, the financial sector has been central to directing financial resources to support economies and societies while governments battle the pandemic. As the length and depth of the economic… Read More »
Cooperative compliance (CC) programs are tax audit regimes that replace conventional, ex-post tax audits, with real-time cooperation between firms and tax authorities. According to the OECD, CC is based on mutual trust, transparency, and cooperation and should provide benefits for both sides. First, tax authorities benefit from increased compliance. Because CC-firms are at low risk… Read More »
Short selling has been viewed as a market mechanism that can potentially disincentivize firms’ opportunistic behaviors such as negative information suppression, as short sellers take actions when they detect the hidden bad news. Extant studies have provided evidence that short selling can help deter management from suppressing negative information in developed economies. However, in emerging… Read More »
Most countries give special treatment to small and medium scale enterprises (“SMEs”) for regulatory compliance given their special needs and limited resources. Countries also grant special treatment and exemptions for data protection compliance, as it is difficult for SMEs to invest large sums into the technological peripherals required to comply with stringent data protection regulations.… Read More »
Supervisory authorities have generally reacted swiftly to the COVID-19 pandemic, deploying support measures such as debt repayment postponement, stimulus packages, and credit guarantees. In some jurisdictions, supervisory authorities also provided capital, liquidity and operational relief to banks. So far, these measures have helped mitigate some of the short-term financial stability risks. However, in many countries,… Read More »
Following the 2008 financial crisis and the Dodd-Frank Act, bank stress tests have become a cornerstone of bank regulation. An important but unexplored issue is the optimal level of transparency of the supervisory stress tests models that are used to project bank capital when conducing the tests.[1] Until 2018, the Federal Reserve provided only a… Read More »
