Partial market value accounting, bank capital volatility, and bank risk

Article Abstract:

The usefulness of the partial market value accounting method is analyzed in terms of its effect on the banking system characterized by securities trading. It is shown that such an accounting methodology fails to correct the tendency to err in the valuation of bank capital of historical cost accounting. Furthermore, the new system does not prove to be more robust than the historical cost method in preventing bank failures.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Banking Regulation, Methods, Laws, regulations and rules, Accounting and auditing, Accounting, Risk (Economics), Financial institutions, Banking law, Bank capital

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Unexpected inflation and bank stock returns: the case of France 1977-1991

Article Abstract:

Research was conducted to examine the effect of unexpected inflation on the stock returns of the French banking industry. A sample of French firms, was divided into two groups, namely, banks and non-financial companies. The goal of the first part of the study was to analyze and compare the sensitivity of returns of banks and non-banks to unexpected shocks in market return, interest rates and inflation rates. The objective of the second part was to calculate risk premia. Results indicate that the stock return generating process seems to incorporate an inflation risk factor which is additional to the interest risk factor documented in other studies.

Economic aspects, Services, France, Inflation (Finance), Bank stocks, Inflation (Economics)

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