From Usefulness to Declining Significance of Deferred Tax Credits: A Critical Consideration of the Post-COVID Period: Empirical and Methodological Limits

Abstract

This study examines the transformation of the role of Deferred Tax Credits (DTCs) in the balance sheets of Greek systemic banks during the period 2022 to 2024. The analysis of the four systemic banks (i.e., Alpha Bank, Eurobank, the National Bank of Greece, and Piraeus Bank) shows a consistent downward trend in the level of Deferred Tax Credits (DTCs), marking a fundamental shift in their significance as an accounting and supervisory variable. As far as the authors are aware, this is the first study to examine this relationship in the post-COVID period. The limited time series and the resulting methodological instability render any attempt at statistical correlation or regression scientifically unreliable. This paper argues that the role of Deferred Tax Credits (DTCs) has shifted from a mechanism of capital support to a residual element of past accounting practices, which makes quantitative analysis both unnecessary and potentially misleading. As a result, this period between 2022 and 2024 should be approached through qualitative and institutional interpretation, supported by descriptive statistical analysis, rather than through empirical econometric modeling. The findings underline a wider transition in the Greek banking system toward genuine capital adequacy, reduced reliance on fiscal instruments, and closer alignment with the evolving European supervisory framework.