Finance Research Seminar – Dr Mamiza Haq
Title: From Earnings Games to Systemic Gains: Rethinking Macro-Prudential Policy in Banking
Date: 5 February 2025
Time: 14:00 – 15:00
Venue: FDC.1.17
If you would like to attend, please register using the following link:
From Earnings Games to Systemic Gains: Rethinking Macro-Prudential Policy in Banking
Speaker: Dr Mamiza Haq
Dr Mamiza Haq holds Bachelor of Commerce (Banking and Finance), Master of Commerce (Finance), Master of Science (Finance) and PhD degrees. She is a Fellow of the Higher Education Academy (HEA). Dr Haq is passionate about teaching banking and finance to her undergraduate and postgraduate students. Her teaching philosophy emphasizes innovation and empathy. She believes learning is a two-way process and creating a platform for the students to engage will enhance their learning process. She has been involved with a number of courses including Banking and Lending Decisions/Financial Institutions, Corporate Finance, Decision Science/Behavioural Economics and Finance, Financial Statement Analysis, Financial Management, Investments. Dr Haq enjoys supervising Honours, Masters and PhD students. In her leisure time, she enjoys listening to podcasts on leadership and social impact. Here is a link to a presentation on my teaching experience. https://www.youtube.com/watch?v=ey-ryOGvBnE Dr Haq’s research interest centres on bank equity, and credit risks, bank regulation, capital adequacy requirement and market discipline, bank competition and efficiency, financial crises, and non-conventional banking (microfinance and Islamic finance). She is also interested in the area of corporate finance including dividend policy, capital structure, mergers and acquisitions and corporate governance. Her research publications have appeared in international and Australian peer-reviewed journals. Dr Haq has received several competitive research grants including ARC Discovery, AFAANZ and AIBE research grants. She is the Deputy Editor for Accounting and Finance and serves in the Editorial Board for Spanish Journal of Finance and Accounting.
Abstract:
Our study examines the impact of macroprudential policy on “earnings quality” and “opportunistic earnings management” in individual banks across 68 developed and developing countries from 1996 to 2019. Our findings show that macroprudential policies, particularly, tightening (loosening) measures, negatively (positively) affect earnings quality, prompting concerns about their effectiveness in promoting long-term financial stability. Specifically, we observe asymmetric effects, with tightening policies having a greater impact on earnings quality than loosening policies. Further, we identify that different types of macroprudential policies exhibit varying effects, with demand-side policies showing longer time lags compared to supply-side measures. Regarding opportunistic earnings management, our results indicate that although tightening supply-side policies generally deter meet-or-beat behaviours, however, liquidity tightening policy may encourage such behaviours. Yet, our results suggest that banks are less likely to manage earnings to just-meet-or-beat prior year’s earnings when demand-side loosening policies are stronger. Additionally, liquidity-focused tightening macroprudential policies significantly reduce earnings management by curbing abnormal loan loss provisions (LLPs), whereas supply-side and demand-side tightening policies may inadvertently increase abnormal LLPs. The results remain robust to several alternative tests and explanations. Our evidence suggests that banks may employ macroprudential policies associated with less earnings games to mitigate agency concerns, regulatory arbitrage, information asymmetry and to establish credible reputation.