Value relevance studies assess how well accounting amounts reflect the market information that investors use for their economic decisions. Analysing a sample of 90 banks listed in 24 European stock markets, this study uses a price model (Ohlson, 1995) and provides evidence that a risk-sensitive metric like regulatory capital is more useful for investors’ decisions than book value of equity and that investors price the parts of regulatory capital that are devoted ideally to absorb losses differently due to the different risks taken. In particular, the part devoted to absorb losses due to credit risk is priced higher than the parts devoted to absorb other risks (e.g. market risks, operational risk). According to our evidence, this is due to the business model of the entities analysed, which are mostly retail and wholesale banks with significant credit exposure to clients and other banks. The paper adds to the literature and has implications for regulators and standard setters showing that the assessment and disclosure of regulatory capital not only strengthens the soundness and the stability of the international banking system (Basle Committee on banking supervision, 1988), but provides to investors useful information for their future investment strategies.

This paper intends to investigate the relationship between the attendance of annual general meetings (AGMs) and company performance in terms of profitability. In particular, it is intended to highlight some elements that can be interpreted as constituting attendance at the shareholder meetings, for example, the number of shareholders present at the shareholder meeting, the share of authorized capital attending the shareholder meeting, and the duration of the shareholder meeting. Following this analysis, attention is devoted to the relationship between corporate performance and shareholder meeting participation (one of the possible governance mechanisms available to monitor the activity carried out by company management). We analyse the AGMs convened for the adoption of financial statements. Empirically, the study uses the minutes of the meetings of a sample of Italian listed companies held in 2017 and 2018 on the occasion of the adoption of financial statements for the 2016 and 2017 fiscal periods, respectively. The main results show a positive relationship between the share of authorized capital attending annual shareholder meetings and the level of corporate profitability of Italian listed companies.

This paper investigates the value relevance of the fair value hierarchy disclosed for financial instruments through a sample of 97 financial entities listed over the period 2011-2016 in the stock markets of 23 European countries. Its main objectives are threefold. First, by analysing the European setting, the paper means to study the value relevance of the fair value hierarchy to judge the choice of the International Accounting Standard Board (IASB) to extend the disclosure of the hierarchy to all the assets and liabilities. Second, the paper aims to evaluate the choice of abandoning management intent as a criterion for the classification and measurement of financial instruments investigating the effect that such an intent has on the value relevance of the fair value hierarchy. Finally, by studying the effect that exposure to risks has on the value relevance of the fair value hierarchical levels, the paper plans to investigate the implications that the disclosure of the hierarchy could have on the rules of Basel 3 capital adequacy. Formulating three different research hypotheses, the findings validate them providing evidence that the value relevance of fair value measurement depends on the source of inputs used to estimate fair value and that both management intent and the risk intensity of the asset book only affect the value relevance of the less reliable fair value estimates. These results are useful for standard setters and regulators. Actually, for the investors decisions, they suggest the importance of disclosing the fair value hierarchy for all the assets and liabilities as required by IFRS 13, as well as the advantage of replacing in IFRS 9 the management intent criterion with the business model test and the characteristics of the instruments for the classification and measurement of financial assets. For the future, the findings suggest the opportunity to introduce filters within the common equity tier 1 for the less reliable fair value estimates. This paper's current and future implications for standard setters and regulators are to avoid earnings management and capital management behaviour possibly affecting the quality of financial reporting.