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Pre-publication revisions of bank financial statements: A novel way to monitor banks?

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  • Guettler, Andre
  • Naeem, Mahvish
  • Norden, Lars
  • Van Doornik, Bernardus

Abstract

We investigate whether pre-publication revisions of bank financial statements contain forward-looking information about bank risk. Using 7.4 million observations of monthly financial reports from all banks in Brazil during 2007–2019, we show that 78 % of all revisions occur before the publication of these statements. The frequency, missing of reporting deadlines, and severity of revisions are positively related to future bank risk. Using machine learning techniques, we provide evidence on mechanisms through which revisions affect bank risk. Our findings suggest that private information about pre-publication revisions is useful for supervisors to monitor banks.

Suggested Citation

  • Guettler, Andre & Naeem, Mahvish & Norden, Lars & Van Doornik, Bernardus, 2024. "Pre-publication revisions of bank financial statements: A novel way to monitor banks?," Journal of Financial Intermediation, Elsevier, vol. 58(C).
    • Handle: RePEc:eee:jfinin:v:58:y:2024:i:c:s1042957324000020
    DOI: 10.1016/j.jfi.2024.101073
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    More about this item

    Keywords

    Banks; Bank performance; Regulatory reporting quality; Regulatory oversight; Machine learning;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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