Bank Earnings Management and Tail Risk during the Financial Crisis

@inproceedings{Cohen2013BankEM,
  title={Bank Earnings Management and Tail Risk during the Financial Crisis},
  author={L. Jonathan Cohen and MARCIA MILLON CORNETT and Alan J. Marcus and Hassan Tehranian},
  year={2013}
}
We show that a pattern of earnings management in bank financial statements has little bearing on downside risk during quiet periods, but seems to have a big impact during a financial crisis. Banks demonstrating more aggressive earnings management prior to 2007 exhibit substantially higher stock market risk once the financial crisis begins as measured by the… CONTINUE READING