| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 107 === This study focuses on bank regulation and supervision as an important mechanism influencing two distinct aspects of discretionary loan loss provision behaviors around the world, namely: income smoothing and timeliness of recognition. Using a large sample of banks across 54 countries from 2001 to 2015, I find sufficient evidence to indicate that banks listed in countries with better regulation and supervision are less likely to use loan loss provisions for earnings management. In addition, I also find that banks listed in countries with better supervision are more likely to record timelier loan loss provisions with respect to changes in current non-performing loans. However, I fail to find evidence of the relation between regulation level and loan loss provision timeliness. These results are consistent with the view that better bank regulation and supervision could encourage banks to report earnings consistent with banks’ true performance. My evidence also suggests that better supervision could encourage banks to provide timely information to the public. Further analysis indicate that my main findings are robust to a combination of regulation and supervision, variable redefinition, or the classification of higher versus lower equity to total assets ratio.
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