A Study of Loan Transfers and Regulatory Capital in the Banking Industry

• Main Authors: Chia-Liang Yen, 顏嘉亮
• Other Authors: Chung-Fern, Wu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/70832811682429498755

碩士 === 國立臺灣大學 === 會計學研究所 === 97 === The purpose of this study is to explore the relationship between loan transfers, including loan sales and securitizations, regulatory capital management and earning smoothing in the banking industry. Banks can focus on their core competencies and release the pressures by selling non-performing loans to AMC. Securitizing their loans can banks improve the structures of their assets and liabilities, as well as increase the methods of funding. Therefore, banks may transfer loans in the motivation of regulatory capital management, earning management, risk management, and funding. Referring to the method mentioned in Karaoglu (2005), this study conducts a research in the banking industry of Taiwan from 2003 to 2007. The empirical research shows that the gains or losses from loan transfers are significantly negatively associated with the regulatory capital ratio before the effect of gains or losses. Also, the gains or losses from loan transfers are significantly negatively associated with the change of return on assets ratios. These conditions represent that the more the regulatory capital ratios or the change of return on assets (before the effect of gains or losses) ratios are, the less the loan transfers gains or losses are. In addition, the shortfalls from last year’s income are significantly negatively associated with gains or losses from loan transfers. Consequently, it is supported that banks use gains or losses from loan transfers to manage regulatory capital and to smooth earnings.