Anticipatory Effects around Proposed Regulation: Evidence from Basel III

• 成果类型: Article
• 署名作者: Hendricks, Bradley E.; Neilson, Jed J.; Shakespeare, Catherine; Williams, Christopher D.
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Michigan System; University of Michigan
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0275
• 发表日期: 2023
• 页码: 285-315
• 关键词: regulation fair disclosure; COMMERCIAL-BANKS; REGULATION FD; INFORMATION; earnings; uncertainty; contribute; ECONOMICS; MARKET; MODEL

摘要

Regulation is often proposed, developed, and finalized over a lengthy rule-making period prior to its adoption. We examine the period over which banking authorities discussed, adopted, and implemented Basel III to understand how firms respond to proposed regulation. We find evidence to suggest that affected banks not only lobbied rule-makers against it but also made strategic financial reporting changes and altered their business models in ways that reduced their exposure to the proposed rule prior to rule-makers finalizing the regulation. Further, our results indicate a sequential response, with banks responding through lobbying and strategic financial reporting prior to making business model changes. These findings highlight the interplay among firms' financial reporting, business model, and political choices in response to proposed regulation and indicate that the appropriate date for an event study may be the regulation's announcement date rather than its adoption or implementation dates.