Exploiting differential interstate branching deregulation across contiguous counties of adjacent states, we investigate the effect of entry threat on incumbent banks' loan loss provisions. Incumbents exposed to entry threat have offsetting incentives; lower provisions make their loan...

In the wake of the financial crisis, policymakers expressed the concern that banks’ use of the incurred loss model exacerbates their lending procyclicality by delaying the recognition of loan losses to recessions. Responding to this concern, the FASB issued Accounting Standards Update 2016-13,...

Building on the recent literature on corruption in bank lending, we examine the effect of country-level timely loan loss recognition by banks on lending corruption using a unique World Bank dataset that covers more than 3,600 firms across 44 countries. We find evidence consistent with timely...