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BIS Capital Adequacy Ratio Management by Mutual Savings Banks

상호저축은행의 BIS자기자본비율 조정 실태분석

  • Received : 2019.03.13
  • Accepted : 2019.06.20
  • Published : 2019.06.28

Abstract

Using the sample of 104 mutual savings banks inspected by the Financial Supervisory Service (FSS) on June 2011, this study examines if mutual savings banks manage BIS capital adequacy ratio using allowance for bad debts through comparison of BIS capital adequacy ratio before and after the 2011 when mutual savings banks experienced a large-scale restructuring by financial supervisory authorities. We find that mutual savings banks mainly use the allowance for bad debts to manage BIS capital adequacy ratio. It also shows that mutual savings banks with a business suspension order by FSS manage BIS capital adequacy ratio more than the others. Lastly, we find that Non Big4 auditors as well as Big 4 auditors don't effectively audit the use of the allowance for bad debts for mutual savings banks to manage their BIS capital adequacy ratio.

Keywords

Mutual Savings Banks;BIS capital adequacy ratio;allowance for bad debts;Big 4 auditor;audit quality

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Fig 1. Comparison of BIS Ratios of Mutual Savings Banks to Commercial Banks

Table 1. Yearly Distribution of Mutual Savings Banks

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Table 2. Yearly Distribution of BIS Ratio9)

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Table 3. Sample Selection Procedure

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Table 4. Descriptive Statistics

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Table 5. Correlation Analysis(Pearson / Spearman)

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Table 6. Descriptive Statistics by Group

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Table 7. Regression Results ΔBIS = α0 + β1ΔLLP + β2ΔLOAN + β3ΔN + β4ΔCAP + β5SIZE + β6OUT + β7BIG4 + ε

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Table 8. Regression Results ΔBIS = α0 + β1OUT + β2ΔLLP + β3OUT*ΔLLP + β4ΔLOAN + β5ΔNI + β6ΔCAP +β7LNSIZE + ε

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Table 9. Regression Results ΔBIS = α0 + β1BIG4 + β2ΔLLP + β3BIG4*ΔLLP + β4ΔLOAN + β5ΔNI + β6ΔCAP +β7LNSIZE + β8OUT + ε

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Table 10. Regression Results ΔBIS = α0 + β1OUT2 + β2ΔLLP + β3OUT2*ΔLLP + β4ΔLOAN + β5ΔNI + β6ΔCAP +β7LNSIZE + ε

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