paper addresses this issue by using a case study of Spain, where the retail banking market was split evenly between …

whether banks smooth earnings to mislead investors and other interested parties, or, by contrast, income smoothing is used to … avoid the existence of market frictions. Using panel data econometric techniques, we find evidence of income smoothing …-1999). However, during 2000-2004, banks relied only on the newly created countercyclical provision to smooth income. This change in …