In this paper, we try to test whether there is evidence of interrelationship between the corporate social responsibility performance of banks and their earnings management efforts. For this reason, we took a sample of 64 European banks and we calculated their EM performance index under the procedure followed by Leventis S and Dimitropoulos P (2010) and used regression models to verify whether there is evidence that they are correlated with published indices by Sustain analytics (formery AIS) regarding the overall score of CSR performance and also individually and the CSR score on the field of reporting, ethics, labor, environment, human rights and governance. This analysis showed interesting correlations between some of the elements and showed that it is a field of further analysis, as proving such a relationship could mean that banks try to compensate their stakeholders for the EM that they operate, by using CSR. However, this was only partly evident in the case of the efforts that the banks make to show positive net incomes whereas LLP’s and security gains figures manipulation on their reports are negatively correlated.
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