Visible Reserves in Banks – Determinants of Initial Creation, Usage and Contribution to Bank Stability
研究了德国银行管理层设立和使用“一般银行风险准备金”的动机，发现这些准备金主要用于监管资本管理和盈余管理，且使用这些准备金的银行未来更少发生困境或违约，有助于增强银行稳定性。
Abstract The opportunity of building up visible “Reserves for General Banking Risks” by the bank management represents a peculiarity in the German financial accounting framework for banks. We investigate German banks' motives for the creation and usage of these reserves and assess their role in financial stability. We find that banks primarily create and use GBR reserves to build up Tier 1 capital for regulatory capital management and earnings management purposes. Most importantly, however, we also reveal that banks using these reserves are less likely to experience a future distress or a bank default event. We therefore conclude that the existence of GBR reserves within the financial accounting framework represents both a convenient capital and earnings management tool for bank managers and a beneficial regulatory instrument to enhance bank stability.