Accounting

Financial integration and external adjustment

Andreas Fischer, Henrike Leonie Groeger, Philip Sauré, Pınar Yeşin, 09 December 2019

Global imbalances are at the core of today’s trade tensions, but official current account statistics may not be sufficient to assess the external positions of financially integrated economies. For instance, balance of payments accounting standards do not prescribe the recording of retained earnings on portfolio equity investment in the current account. This column argues that adjustments in income flows in equity investment therefore remain concealed in official current account statistics. In today’s financially integrated world with existing accounting standards, external adjustment mechanisms should be considered more broadly than just as an evolution of trade balance and exchange rate movements.

24th EBES Conference - Bangkok

We would like to invite you to participate in the 24th EBES Conference - Bangkok, Thailand which will bring together many distinguished researchers from all over the world. Participants will find opportunities for presenting new research, exchanging information, and discussing current issues.

Although we focus on Europe and Asia, all papers from major economics, finance, and business fields - theoretical or empirical - are highly encouraged. The deadline for abstract submissions is October 31, 2017.

Growth and debt-to-GDP ratios

Paolo Mauro, 07 August 2016

Policymakers use a well established traditional accounting method to analyse past paths and predict future paths of debt ratios. But the traditional accounting exercises underemphasise the role of economic growth. This column proposes a simple, extended accounting framework to recognise the importance of growth more fully and explicitly. It quantifies the role of economic growth in debt-to-GDP measurement for Ireland and Italy, who were similarly placed in 2012 but whose paths diverged significantly in subsequent years.

Corporate Finance Theory Symposium

The Cambridge Endowment for Research in Finance (CERF) welcomes submissions for its 2016 Corporate Finance Theory Symposium to be held in Cambridge UK, Cambridge Judge Business School, 16-17 September 2016.

The symposium covers all areas of theoretical corporate finance, including theory papers that combine corporate finance theory with a related area such as banking, market micro-structure, asset pricing, and financial accounting.

We expect to have about 9 papers (each with a discussant) and one keynote speech. This year’s keynote speaker will be Anjan Thakor, John E. Simon Professor of Finance,Director of the PhD Programme, and Director of the WFA Center for Finance and Accounting Research.

Too interconnected to fail = too big to fail?

Daniel Gros, 26 January 2010

Did allowing financial institutions to become “too big” play a role in the financial crisis? This column argues that being “too interconnected” is also a factor, and that US accounting standards should recognise gross derivatives exposure on the balance sheet to make this interconnectedness, and the resulting exposure, clear.