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Ordinary direct capitalization is normally considered procyclical in its present form (De Lisle Grissom, 2011); for this reason, an alternative approach to direct capitalization may be useful in the determination of a robust opinion of value. The valuation standards propose an alternative determination of terminal value in the discounted cash flow analysis, recommending that for cyclical assets, the terminal value should consider … “the cyclical nature of the asset and should not be performed in a way that assumes “peak” or “trough” levels of cash flows in perpetuity” (IVS 105 Valuation Approaches and Methods para 50.21 lett e).

The introduction in International Valuation Standards (IVS) of Cyclical Assets raises several questions for the community of real estate professionals and academicians (IVS, 2022, 105 Valuation Approaches and Methods para 50.09 lett d). Cyclical assets can be defined as property whose value is “influenced by upturn and downturn of the market in a significant way” (d’Amato et al., 2019).

The paper proposes different solutions to the problem. The determination of the exit value using cyclical capitalization allows for a prudent assessment of the value and may be used either as a valuation procedure or a risk analysis method.

The valuation comparison with the traditional valuation techniques will be based on an iteration of exit value in order to determine the effects of the valuation procedure on the opinion of value.

The implication of the valuation procedure is the introduction of a countercyclical valuation method to determine the exit value in order to reach stable and reliable valuations for income-producing properties.

These models may have a social implication, providing valuation for income-producing properties that may deal with the property market cycle in a more efficient way, providing efficient valuation for banks and institutions.

The paper is the first application of such a valuation procedure to the determination of exit value.

This paper aims to analyze the heterogeneous effect of prudential regulation on the stability of banks in the West African Economic and Monetary Union (WAEMU).

The author uses in this study individual bank data from balance sheets, income statements of banks in the WAEMU space and annual reports of the banking commission formed into a three-year panel from the period 2017 to 2019. First, this study uses hierarchical clustering based on specific banking characteristics to determine whether the WAEMU region’s banking markets are heterogeneous or not. Second, this study uses quantile regression approach with fixed effects to explore how that prudential regulation affects the conditional distribution of WAEMU bank stability.

The analysis reveals heterogeneity resulting in two distinct groups. Using the quantile regression approach, this study demonstrates that prudential regulation has a significantly more substantial and positive effect on the upper quantiles than on the lower quantiles of the conditional distribution of WAEMU bank stability. Furthermore, the effect of banking regulation also varies among pan-African cross-border banks, national banks and foreign banks. Among these types of banks, pan-African cross-border banks remain the most stable by adopting prudential regulation. The results remain robust and vary across different WAEMU countries.

The contribution of this study to the literature is multifaceted. First, this study uses individual bank-level constituted in panel data from the WAEMU region to assess the effect of prudential regulation on the stability of the WAEMU’s banking sector. This approach allows for a more granular analysis as this study considers individual regional banks’ specific characteristics and behaviors. Second, this study considers the heterogeneous effect of regulation on the stability of banks within the WAEMU space. This means that this study acknowledges that not all banks are affected similarly by prudential regulations, and this research aims to identify and quantify these differences.

This study investigates and compares the earnings management strategies of financially distressed and non-distressed banks.

Using a regression analysis, this study examines a sample of banks operating in the MENA region. We focus on real earnings management strategies via commission and fee income (CF) and accrual-based earnings management strategies via loan loss provisions (LLP). A subsample analysis was performed, lagged dependent variables and additional control variables were included as a robustness check.

The findings consistently reveal a more extensive use of real earnings management strategies via CF among distressed banks than among non-distressed ones. Specifically, banks smooth their income via CF under distress conditions. However, LLP-based earnings management strategies are only implemented in healthy banks. These behaviors persist in banks that operate under different monitoring systems and institutional settings.

This study marks its entry into the literature debate on accounting and non-accounting decisions that influence bank financial reporting. It argues that, in the presence of financial difficulties, bank managers define earnings management strategies based on the probability of being detected, rather than looking at their costs.

From a prudential perspective, the findings suggest the need for prudential rules to supervise the reporting of CF income associated with high fees or discount incentives used intentionally by bank managers to convince clients to delay or accelerate payments and, consequently, affect reported earnings.

This study adds to the literature by investigating the effect of bank financial distress on both real and accrual-based earnings management to provide a comprehensive analysis of bank earnings management strategies in the presence of financial difficulties.

The increased capital requirements and the implementation of new liquidity standards under Basel III sparked various concerns among researchers, academics and other stakeholders. The question is whether Basel III regulation is ideal, that is, adequate to deal with a crisis, such as the 2007–2009 global financial crisis? The purpose of this paper is threefold: First, perform a stress testing exercise on the US banking sector, while examining liquidity and solvency risk indicators jointly under the Basel III regulatory framework. Second, allow the study to cover the post-crisis period, while referring to key Basel III regulatory requirements. And third, focus on the resilience of domestic systemically important banks (D-SIBs), which are supposed to support the US financial system in times of stress and therefore whose failure causes the entire financial system to fail.

The authors used a sample of the 24 largest US banks observed over the period Q1-2015 to Q1-2021 and a scenario-based vector autoregressive conditional forecasting approach.

The authors found that the model successfully produces accurate forecasts and simulates the responses of the solvency and liquidity indicators to different real and historical macroeconomic shocks. The authors also found that the US banking sector is resilient and can withstand both historical and hypothetical macroeconomic shocks because of its compliance with the Basel III capital and liquidity regulations, which consist of encouraging banks to hold high-quality liquid assets and stable funding resources and to strengthen their capital, which absorbs the losses incurred in a crisis.

The authors developed a framework for testing the resilience of the US banking sector under macroeconomic shocks, while examining liquidity and solvency risk indicators jointly under Basel III regulatory framework, a point not yet well studied elsewhere, and most studies on this subject are based on precrisis data. The authors also focused on the resilience of D-SIBs, whose failure causes the failure of the entire financial system, which previous studies have failed to examine.

This study aims to test the dynamic impact of public debt and economic growth on newly democratized African countries (South Africa and Namibia) and compare the findings with those of newly democratized European countries (Germany and Ukraine) during the period 1990–2022.

The methodology involves three stages: identifying the appropriate transition variable, assessing the linearity between public debt and economic growth and selecting the order m of the transition function. The linearity test helps identify the nature of relationships between public debt and economic growth. The wild cluster bootstrap-Lagrange Multiplier test is used to evaluate the model’s appropriateness. All these tests would be executed using the Lagrange Multiplier type of test.

The results signify the policy switch, as the authors find that the relationship between public debt and economic growth is characterized by two transitions that symbolize that the current stage of the relationship is beyond the U-shape; however, an S-shape. The results show that for newly democratized African countries, the threshold during the first waves was 50% of GDP, represented by a U-shape, which then transits to an inverted U-shape with a threshold of 65% of GDP. Then, for the European case, it was 60% of GDP, which is now 72% of GDP.

The findings suggest that an escalating level of public debt has a negative impact on economic growth; therefore, it is important to implement fiscal discipline, prioritize government spending and reduce reliance on debt financing. This can be achieved by focusing on revenue generation, implementing effective taxation policies, reducing wasteful expenditures and promoting investment and productivity-enhancing measures.

The purpose of this paper is to examine the impact of supervision on banking risk to determine whether prudential measures taken especially after financial crises are effective in limiting banking risks.

The empirical study focused on 210 annual reports of almost all Tunisian banks during the 2010–2019 period. Banking supervision effectiveness is measured by enforcement outputs (i.e. on-site audits and sanctions). The generalized least squares method of multivariate analysis was used to analyze this study.

The results show that supervision set up and on-site audits reduce bank risk, while the relationship between sanctions and risk appears to be non-significant. The results still hold after robustness tests by changing the bank's risk-taking indicators.

This study has important implications for managers and investors in the Tunisian context. In particular, the findings provide microevidence for the impact of supervision in Tunisian banks to reduce their risk-taking. The empirical results have important implications for the decision-making of bank managers and regulators in Tunisia as well as for relevant actors in similar emerging economies.

This study extends the previous literature on supervision by examining the relationship between supervision and banking risk in an emerging country, which has been little explored, Tunisia in particular. Furthermore, this study examines whether supervision reduces risk borne by Tunisian banks, and to the best of the researchers' knowledge, it is one of the pioneering studies of supervision in the Tunisian market. This latter market has different economic, political and social attributes compared to developed countries. So, this paper helps to clarify the impact of supervision enforcement and macroprudential policies. In addition, this paper strongly contributes to the various stakeholders “understanding of the importance and implication of supervision practices. However, since banks tend not to reduce their participation in risky activities to seek higher profits, supervisory policymakers and practitioners should also take a closer look at the composition of banks” investment portfolios to reduce moral hazard and regulatory arbitrage behavior. Empirically, the authors measure supervision by on-site audits and sanctions and examine how they affect bank risk level, which was never approached in Tunisia.

There is emerging evidence in the accounting literature that investors react negatively to corporate greenwashing. But does that hold for all investors, or do different types of investors react differently? This paper aims to study retail investors’ responses to media reports on corporate greenwashing and how these responses depend upon the investors’ social value orientation. The authors argue that media reporting on corporate greenwashing negatively affects the rationale for allocating funds to firms engaging in greenwashing. The authors also expect this reaction to be stronger for prosocial investors compared to proself investors.

The authors conduct an online experiment with 229 participants representing retail investors in the German-speaking countries.

The results show that retail investors who received media reports on deceptive disclosure invest more funds in the company that does not engage in greenwashing (and less in the firm that engages in greenwashing) than investors who did not receive these reports. The authors’ results provide novel evidence that this effect primarily holds for investors with a prosocial value orientation. Finally, the authors’ data show that lower trust in the firm that engages in greenwashing partially mediates the effect of media reports on investor choices.

The authors provide unique evidence how different types of investors react to media reports on greenwashing. The authors find that moral motives, rather than risk-return considerations, drive investor responses to greenwashing. Overall, these findings support the important function of the media as an intermediary in stock market participation and highlight the pivotal role of individual traits in investors’ responses to greenwashing.

This study aims to map the digital risks for the Islamic finance industry. Since 2010, the financial space has largely shifted from being banking-centric to the entrepreneurship spectrum, benefiting from groundbreaking innovations in computer technology. The problem of Islamic Finance is that it is still within its banking-centric moment that is risk averse leading to financial exclusion. As with all innovations, there are associated risks that require careful consideration to ensure the reaping of the benefits of these technologies while controlling the risks at its lowest. In this context, the aim of this study is to highlight the risks associated with financial technologies (FinTech) to prepare the Islamic finance sector to serve the economic ideals of Maqāṣid al-Shariah in financial inclusion and profit and loss sharing. The main research question is as follows: What do Islamic Finance industry need to do to manage the digital risks for financial inclusion?

This study uses narrative review method in analysing the discourse of financial technology literature using qualitative data collected from the literature on the topic. It aimed to problematise associated digital risks from the Shariah compliance and Maqā¸ṣid al-Shariah critical viewpoints. Considering the nature of this conceptual study, it adopts a qualitative methodology by using discourse and thematic analysis of the literature that can lay the foundation for future empirical testing on the topic.

The study found that managing risks faced by the Islamic financial sector while adapting to the digital era can be divided into two main clusters: risk mitigation for Shariah-compliant FinTech and risk avoidance for Shariah non-compliant innovations. The high level of gharar associated with current practices in both cryptocurrencies and smart contracts needs additional regulation and simulation before they can be reconsidered for market-wide application. Cloud computing, crowdfunding and big data have promising applications that can address the limitations of the Islamic finance industry, particularly in terms of reducing transactional costs.

This conceptual article offers some insights into the subject; nevertheless, it does not attempt to establish causation or generalise the results. Additional statistical testing is required prior to generalising the results.

Due to the difficulties experienced since its inception, the Islamic financial industry is in urgent need of the cutting-edge solutions required to gain a competitive edge in the market and get over the limits that came with its late entry into the financial sector. Mapping digital risks is imperative for the development of comprehensive prudential risk management strategies for the Islamic finance industry that can fix its problems and enable it to deliver the more favourable Shariah-based solutions, rather than remaining in the lower bands of Shariah compliance.

Findings of the study lay the foundation for empirical testing the volatility of FinTech innovations for the Islamic finance industry to reduce uncertainties and generate reliable forecasts. Scholarship on managing digital risks for Islamic financial institutions is still developing due to the covid global lockdown and the looming recession, and this study will help enhance theorisation necessary that can aspire economic recovery after current challenges.

This paper examines the impact of Central Bank Digital Currencies (CBDCs), regulated stablecoins and tokenized traditional assets on the cryptocurrency market, following the guidelines set by the Basel Committee. This study aims to analyze the implications for secure storage, cross-border transfers and necessary investments.

The paper uses a policy analysis approach to assess the potential effects of the Basel Committee’s regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It explores their impact on the cryptoasset market, strategies of central and commercial banks, payment systems and risk management.

The adoption of CBDCs, regulated stablecoins and tokenized traditional assets is expected to grow rapidly in the coming years. It raises concerns about secure storage, cross-border transfers and required investments. Central banks are likely to introduce CBDCs and authorize stablecoin issuance, aiming for efficient monetary policies and risk management. Basel III regulations may lead to asset tokenization by banks, reducing asset size and increasing fee-based income.

This paper provides insights into the potential impact of the Basel Committee's regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It contributes to the understanding of the evolving cryptoasset market and the strategies of central and commercial banks in adopting these technologies. The findings offer valuable information for policymakers, regulators and market participants in navigating the changing landscape of digital assets.

This paper aims to investigate the effects of macroprudential policies in Brazil on the banking sector.

Autoregressive models with distributed lags (ADL) are estimated to verify whether such regulatory measures affected the volume of credit, the banking spread and the concentration index of the five largest Brazilian banks. In addition to the variables of interest, monthly macroeconomic data from 2011 to 2021 are considered.

Our results suggest that macroprudential policies are effective in reducing credit volume. More importantly, our findings highlight two possible adverse effects of these instruments. Firstly, macroprudential tightenings are associated with increases in bank spread. Secondly, tightening measures contribute to increasing bank market concentration.

These findings are useful for the scientific literature that investigates the regulation of the financial system by providing empirical evidence of the effects of Brazilian macroprudential measures on investors, policymakers and other economic agents whose well-being is associated with economic stability.