Search Results
Working Paper
Beyond the numbers: an analysis of optimistic and pessimistic language in earnings press releases
In this paper, we examine whether managers use optimistic and pessimistic language in earnings press releases to provide information about expected future firm performance to the market, and whether the market responds to optimistic and pessimistic language usage in earnings press releases after controlling for the earnings surprise and other factors likely to influence the market*s response to the earnings announcement. We use textual-analysis software to measure levels of optimistic and pessimistic language for a sample of approximately 24,000 earnings press releases issued between 1998 and ...
Working Paper
Two flaws in business cycle accounting
Using ?business cycle accounting? (BCA), Chari, Kehoe and McGrattan (2006) (CKM) conclude that models of financial frictions which create a wedge in the intertemporal Euler equation are not promising avenues for modeling business cycle dynamics. There are two reasons that this conclusion is not warranted. First, small changes in the implementation of BCA overturn CKM?s conclusions. Second, one way that shocks to the intertemporal wedge impact on the economy is by their spillover effects onto other wedges. This potentially important mechanism for the transmission of intertemporal wedge shocks ...
Working Paper
Market price accounting and depositor discipline in Japanese regional banks
We examine the determinants of Japanese regional bank decisions concerning pricing unrealized losses or gains to market. We also examine the impact of these decisions on the intensity of depositor discipline, in the form of the sensitivity of deposit growth to bank financial conditions. To obtain consistent estimates of depositor discipline, we first model and estimate the bank pricing-to-market decision and then estimate the intensity of depositor discipline after conditioning for that decision. We find that banks were less likely to price to market the larger were their unrealized ...
Journal Article
Economic statistics: new needs for the twenty-first century
Selected Papers from a Conference Cosponsored by the Federal Reserve Bank of New York, the Conference on Research in Income and Wealth, and the National Association for Business Economics, July 11, 2002. Beverly Hirtle examines the market risk capital figures reported to regulators by U.S. bank holding companies (BHCs) to assess the extent to which such disclosures provide meaningful information about bank risk. The study by Michael J. Fleming finds that the commonly used bid-ask spread--the difference between bid and offer prices--is a useful tool for assessing and tracking liquidity in the ...
Journal Article
Making the numbers
Journal Article
Recent accounting standard update clarifies and adds guidance to troubled debt restructurings
Although some believe the changes could lead to more loans reported as troubled debt restructurings, the update?s purpose is to explain and expand on previous guidance.
Journal Article
Assessing the condition of Japanese banks: how informative are accounting earnings?
This article examines the accounting and stock market performance of banks from 1991 to 1997. Overall, the results indicate that the accounting, disclosure, and regulatory practices of Japanese banks have drive a wedge between their accounting and stock market returns in recent years and, furthermore, that regulatory forbearance might have become a more important source of value to shareholders than the value of assets in place.
Report
Capital account liberalization as a signal
This paper presents a model in which a government's current capital controls policy signals future policies. Controls on capital outflows evolve in response to news on technology, contingent on government attitudes toward taxation of capital. When there is uncertainty over government types, a policy of liberal capital outflows sends a positive signal that may trigger a capital inflow. This prediction is consistent with the experience of several countries that have recently liberalized their capital accounts.