Javier Gómez Biscarri, director of the MSc programmes and associate professor of  accounting, finance and econometrics, has recently published a working paper in one of the main accounting journals (the Review of Accounting Studies).


Bank Earnings and Regulatory Capital Management using Available for Sale Securities


In the paper, Professor Gómez and his co-authors (Mary Barth and Ron Kasznik from Stanford Graduate School of Business and  Germán López from Universidad de Navarra) show evidence of how banks use the peculiar accounting treatment of Available-for-Sale securities to manipulate their earnings measures and, as a consequence, their regulatory capital. These earnings management strategies are used with the objectives of smoothing income, increasing low levels of regulatory capital and avoiding losses, as well as the  building of hidden reserves through earnings baths.



Javier Gómez Biscarri
MA Economics, UCLA
PhD Business Economics, UCLA


Professor Gómez Biscarri is also a lecturer at IESE Business School and teaches in the Competition and Market Regulation, Economics of Public Policy, and Finance programmes at the Barcelona GSE.


His research interests include the relationship between accounting and bank strategies, earnings management and depositor discipline. He is also interested in the effects of fair value accounting in asset pricing, and in time series analysis of co-integration systems.


You can find out more about Prof. Gomez-Biscarri’s research on his personal webpage.


Tags: banking , finance , javier gomez-biscarri , research , working paper