Index

Note: Page numbers in italics indicate fi gures and in bold indicate tables on the corresponding pages.

alternative investments after the fi nancial crisis 176 Anandarajan, A. 165 André, P. 174 auditors 23

Ball, R. 17 bank net assets to capital ratio (BNATNA) 86 – 87 , 89 – 90 Bank of International Settlements (BIS) 228 Bank of Spain 183 , 194 – 197 , 195 – 196 , 206 – 207 Barclay, M. J. 94 Basel Accord of 1988 157 , 159 , 159 Beatty, A. 166 Beck, T. 84 – 85 Bevan, A. 82 – 83 Bhagat, S. 22 Black, B. 22 Black-Scholes model 168 – 169 bond market development in Brazil 217 – 220 , 219 bond maturity 175 Booth, L. 90 Brazil: accounting regimes in 220 – 221 ; bank’s business model in 226 – 228 , 227 ; bond market’s development in 217 – 220 , 219 ; effects of economic crisis in 224 – 230 , 226 – 229 ; equity markets in 215 – 217 , 216 – 217 , 217 , 228 , 228 – 229 ; fi nancial instruments in 224 ; introduction to fi nancial crisis in 211 – 212 , 212 ; marketbased capital adequacy requirements in 221 – 222 , 222 ; mark-to-market

accounting in 222 – 224 ; regulatory regimes and fi nancial stability in 229 , 229 – 230 ; state of the banking industry in 212 – 215 , 214 budget defi cit and leverage 81 , 100 budget defi cit to GDP ratio (BUDGET) 91 Bushman, R. M. 166 business combinations 137 – 139 ; under common control 139 – 140

Caixa Econômica Federal (CEF) 213 Carnegie Investment Bank 168 – 169 , 177 Central Bank of Brazil (BCB) 212 – 215 , 214 , 220 – 221 , 221 – 222 , 222 , 228 Chang, J. 23 Clausen, Christian 160 Coles, J. L. 22 collateralized debt obligations (CDOs) 160 common-law rule 68 Companies Act 2006 62 , 66 – 67 ; conclusions on the statement of general duties 75 – 76 ; duty not to accept benefi ts from third parties 74 – 75 ; duty to act within their powers 68 ; duty to avoid confl icts of interest 73 – 74 ; duty to declare an interest in proposed transactions or arrangements 75 ; duty to exercise independent judgment 71 ; duty to exercise reasonable care, skill, and diligence 71 – 73 ; duty to promote the success of the company 69 – 71 ; general statement 67 – 68

Company Law Review (CLR) 76 n6 Company Law Review Steering Group (CLRSG) 62 ; development of ESV model and 64 – 65 comparative advantage 13 , 51 n1 consolidation of investees under

IFRS: background on 115 – 116 ; business combination accounting and 137 – 139 ; business combination under common control and 139 – 140 ; comparing US GAAP to 134 – 135 ; consideration of purpose and design in 118 ; de facto power over the investee and 126 – 128 ; disclosures and 134 ; effect on business combination accounting 137 – 139 ; exposure to variability in returns and 130 ; identifying how decisions about the relevant activities are made and 120 – 121 ; identifying the investee and 118 – 119 ; identifying the relevant activities of the investee and 119 – 120 ; joint arrangements 140 – 142 ; link between power and returns and 130 – 134 ; nonstructured entities and 122 – 126 ; overview of IFRS 10 model and 116 – 117 ; structured entities and 128 – 130 ; structured vs . nonstructured entities and 121 – 122 convergence and corporate characteristics: additional tests 44 – 49 , 45 – 48 ; conclusions on 49 – 51 ; control variables 21 – 26 ; dependent variables 20 ; description of variables 58 – 59 ; descriptive statistics 26 – 32 , 27 – 31 ; independent variables 20 – 21 ; introduction to 13 – 16 ; literature review and hypothesis 16 – 19 ; logit test results 35 – 44 , 36 – 43 ; Pearson correlation 32 – 35 , 33 – 34 ; research design 19 – 20 , 19 – 26 ; variables in the model 20 corporate bonds 218 – 220 corporate characteristics See convergence and corporate characteristics corporate governance 22 – 23 , 62 , 76 n7; corporate objectives and directors’ duties under SV and STV models and 63 – 64 Corporate Governance Reform (CGR) 62 – 63 , 76 n7 country risk (CRISK) 90 , 100 covenants 108 n4 Cox, C. 5 credit losses in Swedish banks 161 – 167 , 163 , 165 creditors’ legal rights index (CRSTR) 86 , 89 , 99 customer-driven capitalism 60

Danbolt, J. 82 – 83 Database of the Institutional

Characteristics of 85 Developing and Developed Countries/2006 25 de facto power over the investee 126 – 128 De Jong, A. 86 Demirgüç-Kunt, A. 85 Department for Business, Energy, and Industrial Strategy (DBEIS),

UK 62 descriptive statistics on convergence and corporate characteristics 26 – 32 , 27 – 31 Developments in Corporate

Governance and Stewardship 63 Dimitripoulos, P. E. 165 Ding, Y. 21

“End of Libertarianism, The” 5 enlightened shareholder value (ESV) model: development of 64 – 66 ; introduction to 60 – 62 ; reform of directors’ duties in 66 – 75 ; timetable of development of 62 – 63 equity markets, Brazilian: development of 215 – 217 , 216 – 217 , 217 ; impact of the fi nancial crisis in 228 , 228 – 229 Eshleman, J. D. 23 European Central Bank (ECB) 183 European Economy and Monetary

Union (EMU) 181 European Union (EU) 13 ; adoption of the IFRS 9 in ( see IFRS 9 adoption in Europe); Eastern countries of 53 n21; Global Systemically

Important Banks (G-SIBs) 145 – 147 ;

Stability and Growth Pact 25 , 90 ; Takeover and Transparency

Obligations Directives 67 ex ante bargaining power 108 n4

expected credit loss (ECL) 143 , 144 – 145 ; impact assessment of

IFRS 9 and 145 – 147 ; robust validation process and governance framework for measurement of 147 – 148 expected loss model (ELM) 162 , 164 , 167

fair value accounting 3 , 11 n6;

Carnegie case 168 – 169 , 177 ; HQ case 170 , 170 – 174 , 177 ; in Sweden 157 , 167 – 174 , 168 , 170 Fama, E. F. 23 Fan, J. P. H. 85 , 86 , 92 Fiechter, P. 174 Financial Accounting Standards Board (FASB) 4 , 116 , 134 – 135 ; litigious business environment in the US and 11 Financial Reporting Council (FRC),

UK 63 , 76 – 77 n10, 76 n8 Financial Times 60 fi nancing defi cit (FDSALE) 92 fi rm size: growth and 23 ; leverage and 94 Forbes, S. 3 Forbes Media 3 foreign direct investment ratio (FRINVGDP) 89 , 99 – 100 foreign investment and leverage 85 – 86 Frank, M. Z. 91 , 94 French, K. R. 23 French Research Centre in

International Economics 25

GAAP 5 , 116 ; business combinations and 137 – 140 ; consolidation under

IFRS compared to 134 – 135 ; joint arrangements and 140 – 142 ; variable interest entities (VIEs) and 135 – 137 ; v. IFRS, question about adopting 7 – 10 Gaerremynck, A. 21 GDP growth rate and public debt (PUBDGP) 87 , 90 , 100 Gebhardt, G. 165 Gersbach, H. 157 Gingerich, D. W. 63 global fi nancial crisis (GFC), 2008 : in Brazil ( see Brazil ); changing regulatory conditions and new accounting policies as result of

( see Swedish banks ); enlightened shareholder value (ESV) and 60 ; fi rm leverage and 79 – 82 , 83 – 85 ; impact in Spain ( see Spain ); information asymmetry and moral hazard in 84 ; introduction to primary causes of 3 – 6 Global Systemically Important Banks (G-SIBs) 145 – 147 governance, corporate 22 – 23 Goyal, K. V. 91 , 94 Graham, J. 158 Gramm, P. 5 Greenspan, A. 5 – 6 growth and leverage 94

Hagströmer, Sven 170 Hail, L. 13 Hall, P. A. 63 Haller, H. 157 Harzing, A. W. 15 high-tech sector 85 – 86 , 89 , 100 HQ investment bank 170 , 170 – 172 , 177 ; implications of fair value accounting for 172 – 174 Huizinga, H. 85

IFRIC 15 10 IFRIC 23 10 IFRS (International Financial

Reporting Standards): adoption of

IFRS 9 in Europe and ( see IFRS 9 adoption in Europe); in Brazil ( see

Brazil ); change in, after the crisis 6 – 7 ; consolidation of investees under ( see consolidation of investees under

IFRS ); convergence and corporate characteristics with adoption of ( see convergence and corporate characteristics ); cost-benefi t tradeoff in adopting 13 – 14 ; identifying the investee 118 – 119 ; IFRS 10 control model overview 116 – 117 ; literature review and hypotheses on adoption of 16 – 19 ; litigious business environment in the US and 11 ; option to postpone adoption of 51 n2; purpose and design 118 ; in Sweden ( see Swedish banks ); tax effects of 24 ; v. US GAAP, question about adopting 7 – 10 IFRS (International Financial

Reporting Standards) 9 adoption

in Europe: conclusion and areas of further work on 151 – 152 ; fi nancial stability implications of 148 – 151 ; impact assessment on 145 – 147 ; introduction to 143 – 144 ; robust validation process and governance framework for the

ECL measurement in 147 – 148 ; transitional arrangements of fi ve years 144 – 145 , 145 incurred loss model (ILM) 162 , 164 – 167 , 177 industry risk (IRISK) 91 infl ation and leverage 81 , 90 , 100 information asymmetry 84 Institutional Profi les Database 53 n22 interest coverage ratio (ICR) and leverage 94 , 99 International Accounting Standards (IAS): IAS 24 10 ; IAS 39 Basis for

Conclusions 164 ; IAS 41 157 International Accounting Standards

Board (IASB) 6 – 7 , 116 , 166 ; joint arrangements 140 – 142 International Accounting Standards

Committee (IASC) 163 International Auditing Standards 14 International Monetary Fund (IMF) 183 , 206 International Organization of Securities

Commissions (IOSCO) 163

Jensen, M. C. 93 Jin, L. 35 junk bonds 176

Knight, F. H. 84 Koonce, L. 4

laissez-faire approach 64 Lang, L. H. 24 Lehman Brothers 165 Lemmon, M. L. 92 Leventis, S. 165 leverage: banks’ net assets ratios and 86 – 87 , 89 – 90 ; budget defi cit to GDP ratio (BUDGET) and 91 , 100 ; cash turnover and 23 – 24 ; conclusions on 105 – 106 ; control variables 90 – 91 ; country risk (CRISK) and 90 , 100 ; countryspecifi c variables 89 – 91 ; crisis impact on 83 – 85 ; data and sample 87 , 88 ; defi nition of 88 – 89 ; defi nition of variables 107 ; descriptive statistics 94 – 100 , 95 – 98 ; fi nancing defi cit and 92 ; fi rm-level characteristics and 92 ; fi rm size (SIZE) and 94 ; fi rm-specifi c variables 92 – 94 ; foreign investment and 85 – 86 , 89 , 99 – 100 ; growth and 94 ; high-tech sector and 85 – 86 , 89 , 100 ; industry risk (IRISK) and 91 ; industry-specifi c variables 91 ; infl ation and 81 , 90 , 100 ; interest coverage ratio (ICR) and 94 , 99 ; introduction to 79 – 82 ; literature and hypotheses on 82 – 87 ; market capitalization ratio and 81 , 90 – 91 , 100 ; performance/ growth opportunities (MVBV) and 93 ; profi tability (ROA) and 92 – 93 ; public debt level and

GDP growth and 87 , 90 , 100 ; regression analysis 100 – 105 , 101 – 103 ; research design 87 – 94 , 88 ; strength of creditors’ rights protection laws and 86 , 89 , 99 ; tangibility of assets (TATA and

LATA) and 93 , 94 ; tax system and 81 , 91 Li, S. 14 , 21 Liao, S. 166 liquidity coverage 175 litigious business environment in the

US 11 logit test results on convergence and corporate characteristics 35 – 44 ,

36 – 43

Long, M. S. 94 Lula da Silva, Luiz Inácio 225 – 226

Malitz, I. B. 94 market capitalization ratio (MCAPCR) 81 , 90 – 91 , 100 market-to-book (MTB) ratio 53 n19, 94 mark-to-market accounting 3 – 4 ; in

Brazil 222 – 224 Miguel, de A. 83 Miller, E. M. 85 Modigliani-Miller (MM) condition 158 moral hazard 84 Morck, R. 35 Müller, J. 157 Myers, S. C. 35 , 94

NAFTA 13 National Bank for Economic and

Social Development (BNDES) 213 National Monetary Council (CMN,

Conselho Montetário Nacional) 211 – 212 , 221 net asset ratios, bank 86 – 87 , 89 – 90 New York State Society of Certifi ed

Public Accountants (NYS-SCPA) 9 Nissim, D. 92 Nobes, C. W. 154 non-variable interest entities (non-

VIEs) 135 Nordea 159 , 160 , 163 Novotny-Farkas, Z. 165 , 166 NYSE: Corporate Governance

Guide 62

OECD 183 On the Principles of Political

Economy and Taxation 51 n1 ownership concentration 23

Pearson correlation: on convergence and corporate characteristics 32 – 35 , 33 – 34 ; on leverage 99 Peng, G. 23 Penman, S. H. 92 performance/growth opportunities (MVBV) and leverage 93 Pindado, J. 83 pluralist approach 64 – 65 Polman, Paul 60 preferred stock 175 profi tability (ROA) and leverage 92 – 93 Pudelko, M. 15

Qviberg, Mats 170

Rajan, R. G. 82 Ramanna, K. 21 regulation, accounting, in Spain 200 – 206 , 201 – 202 relevant activities of the investee 119 – 120 Ricardo, David 51 n1 Roosevelt, F. D. 5 Rousseff, Dilma 225 – 226

Securities and Exchange Commission (SEC) 8 – 9 shareholder value (SV) model: corporate objectives and directors’

duties under 63 – 64 ; introduction to 60 – 62 Shivakumar, L. 17 Slate 5 Sletten, E. 21 Spain: brief analysis of the crisis in 180 – 181 ; conclusions on regulatory changes in 206 – 208 , 207 ; crisis is a “W”: 2012 –2013 184 – 185 ; and crisis unleashed: 2008 –2011 183 – 184 ; economic impact of the crisis in 181 – 185 , 182 ; evolution of accounting standards in, 2007 –2017 203 – 206 ; fi nancial support measures implemented to combat the crisis in 197 – 200 ; impact of the crisis on capital markets in 185 – 186 , 186 ; impact of the crisis on public and private debt in 187 – 189 , 187 – 190 ; impact of the crisis on the banking industry in 190 – 197 , 192 – 193 , 195 – 196 ; impairment of credit and dynamic provision of the Bank of 194 – 197 , 195 – 196 ; overview of accounting regulation in, before the crisis 200 – 203 , 201 – 202 ; savings banks in 190 – 194 , 192 – 193 ; when the crisis gives in: 2014 onwards 185 Stability and Growth Pact 25 , 90 stakeholder value (STV) model: corporate objectives and directors’ duties under 63 – 64 ; introduction to 61 Strategic Plan for Fiscal Years 2014 –2018 8 – 9 Stulz, R. M. 24 Sun, H. 23 Swedish banks: behavior of government authorities and, during the crisis 160 – 161 ; changes in accounting regime before the introduction of fair value accounting in 157 ; and changes in fi nancial market in response to the global fi nancial crisis 174 – 176 ; conclusions on 176 – 177 ; effects of fair value accounting in 167 – 174 , 168 , 170 ; historical background of 154 – 156 , 156 ; multinational companies and 154 – 155 ; occurrence and accounting treatment of credit losses by 161 – 167 , 163 , 165 ; pre-crisis capital adequacy in 157 – 160 , 159

tangibility of assets (TATA and LATA) and leverage 93 , 94 tax system: effects of IFRS 24 ; leverage and 81 , 91 Temer, Michel 226 Teoh, S. H. 23 Thomson Bank One 15 ; data and sample 19 , 19 – 20 Thomson Financial-Worldscope 15 ; data and sample 19 , 19 – 20 Titman, S. 85 Tobin’s Q 15 – 16 ; fi rm’s performance and 21 ; see also convergence and corporate characteristics

UK’s Company Law Review (CLR),

The 62 uncertainty and fi nancing structure 84 – 85 Unilever 60

Van Binsbergen, J. 158 variability in returns, exposure to 130 variable interest entities (VIEs) 135 – 137 Verriest, A. 21 voting rights, investee 120 – 122 ; de facto power over the investee and 126 – 128 ; nonstructured entities and 122 – 126 ; structured entities and 128 – 130

Wall Street Journal 3 Weisberg, J. 5 Wesburgy, B. 3 “Why Mark-To-Market Accounting

Rules Must Die” 3 Williams, C. D. 166 Wong, T. J. 23 World Bank 86 , 89 ; Doing Business

Survey 87 Worldscope 87

Yang, J. 158

Zender, J. F. 92 Zingales, L. 82