nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2009‒06‒17
eight papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Leverage Bubbles. By Fares Triki
  2. Asset Liability Management for Banks By Giandomenico, Rossano
  3. The increase of the collection level of tax levies - a source of budgetary revenue By Cioponea, Cristina Mariana
  4. Some considerations on accounting for pawnshops in Romania By Huian, Maria Carmen
  5. Risk management by the Basel Committee: evaluating progress made from the 1988 Basel Accord to recent developments By Ojo, Marianne
  6. "'Enforced Indebtedness' and Capital Adequacy Requirements" By Jan Toporowski
  7. Optimal Taxation in Theory and Practice By N. Gregory Mankiw; Matthew Weinzierl; Danny Yagan
  8. Reviewing regulatory objectives: should the scope of regulation be extended? By Ojo, Marianne

  1. By: Fares Triki (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper investigates the relation between liquidity and asset prices. It shows that, when banks balance sheets are marked to market and banks are targeting a financial leverage level - a situation similar to current environment - formation of Leverage Bubble phenomenon and suggests a new regulation rule based on a Dynamic Leverage Ratio (DLR) rule.
    Keywords: Financial crises, rational bubbles, dynamic leverage ratio, mark to market accounting, asset pricing, macroprudential regulation, market liquidity.
    JEL: G14 G18 G20 G28
    Date: 2009–05
  2. By: Giandomenico, Rossano
    Abstract: The model, by using a contingent claim approach, determines the fair value of the banks liabilities accounting for the protection and the surrender possibility. Furthermore, it determines the implied duration of banks liabilities so to show that the surrender possibility will reduce the effective duration of banks liabilities. Implications for the immunization are also treated.
    Keywords: Contingent Claim, Duration
    JEL: G13 G21
    Date: 2008–07–05
  3. By: Cioponea, Cristina Mariana (Universitatea Spiru Haret, Facultatea de Finante si Banci)
    Abstract: Our country, as a recent member of The European Union must improve tax collection, simplify tax low and improve the activity of fiscal administration.
    Keywords: arierate fiscale; control fiscal; executare silita
    JEL: G28
    Date: 2009–06–01
  4. By: Huian, Maria Carmen
    Abstract: Because of the financial and economic crisis that has affected Romania since October 2008, many people do no longer qualify for the bank loans they need to finance their investments or daily expenses. The alternative could be getting the money by pledging a personal good (especially jewelries) to a pawnshop. According to Romanian laws, pawnshops are non-banking financial institutions that offer monetary loans in exchange for movable assets that are pledged by the customers. They are organized as commercial companies and are supervised by the National Bank of Romania, being recorded into the Entry Register held by this institution. Nonetheless, the pawnshops do not apply accounting rules available for credit institutions, but they prepare the financial statements according to the regulation applied by commercial companies. The paper addresses the peculiarities of the pawnshops’ activities in terms of legal, fiscal and accounting aspects. By giving a practical example, the paper emphasizes the application of the specific Romanian legislation, taking into account three different scenarios. The paper discusses the fiscal aspects (mainly the value added tax) that rise from the sell of the items or the cashing of the interest and loan.
    Keywords: pawn contract; pawned items; loan; interest
    JEL: M41 G29
    Date: 2009–05–20
  5. By: Ojo, Marianne
    Abstract: This paper traces developments from the inception of the 1988 Basel Capital Accord to its present form (Basel II). In highlighting the flaws of the 1988 Accord, an evaluation is made of the Basel Committee’s efforts to address such weaknesses through Basel II. Whilst considerable progress has been achieved, the paper concludes, based on one of the principal aims of these Accords, namely the management of risk, that more work is still required particularly in relation to hedge funds and those risks attributed to non bank financial institutions.
    Keywords: risk;management;regulation;banks;Basel;Committee
    JEL: K2
    Date: 2008–08
  6. By: Jan Toporowski
    Abstract: The capital adequacy requirements for banks, enshrined in international banking regulations, are based on a fallacy of composition--namely, the notion that an individual firm can choose the structure of its financial liabilities without affecting the financial liabilities of other firms. In practice, says author Jan Toporowski, capital adequacy regulations for banks are a way of forcing nonfinancial companies into debt. "Enforced indebtedness" then reduces the quality of credit in the economy. In an international context, the present system of capital adequacy regulation reinforces this indebtedness. Proposals for "dynamic provisioning" to increase capital requirements during an economic boom would simply accelerate the boom's collapse. Contingent commitments to lend to governments in the event of private-sector lending withdrawals, alongside lending to foreign private-sector borrowers, are a much more viable alternative.
    Date: 2009–05
  7. By: N. Gregory Mankiw; Matthew Weinzierl; Danny Yagan
    Abstract: We highlight and explain eight lessons from optimal tax theory and compare them to the last few decades of OECD tax policy. As recommended by theory, top marginal income tax rates have declined, marginal income tax schedules have flattened, redistribution has risen with income inequality, and commodity taxes are more uniform and are typically assessed on final goods. However, trends in capital taxation are mixed, and capital income tax rates remain well above the zero level recommended by theory. Moreover, some of theory's more subtle prescriptions, such as taxes that involve personal characteristics, asset-testing, and history-dependence, remain rare in practice. Where large gaps between theory and policy remain, the difficult question is whether policymakers need to learn more from theorists, or the other way around.
    JEL: H21 H24 H25
    Date: 2009–06
  8. By: Ojo, Marianne
    Abstract: This paper will consider whether the scope of financial regulation should be extended and if so, ways in which this could occur. In order to carry out these tasks, it will not only address problems identified from the recent crises and Basel 2, gaps which exist in some of the responses to these issues, but will also consider what roles other parties such as central banks and external auditors can play in achieving financial objectives. To a certain extent, it will address these issues by making references to proposals which have been put forward from different sources. It will introduce the points of discussion through an overview of global developments which have necessitated the need for a review of financial regulation and through a review of the present regulatory objectives.
    Keywords: risk;external;auditor;bank;regulation;financial;objectives
    JEL: K2
    Date: 2009–06

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