Date of Award

Spring 5-17-2013

Degree Type

Dissertation

Degree Name

Ph.D.

Degree Program

Financial Economics

Department

Economics and Finance

Major Professor

M. Kabir Hassan

Second Advisor

James R. Davis

Third Advisor

Gerald A. Whitney

Fourth Advisor

Tarun Mukherjee, Ph.D.

Fifth Advisor

Atsuyuki Naka

Abstract

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.

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.

Rights

The University of New Orleans and its agents retain the non-exclusive license to archive and make accessible this dissertation or thesis in whole or in part in all forms of media, now or hereafter known. The author retains all other ownership rights to the copyright of the thesis or dissertation.

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