This paper examines banks' disclosures and loss recognition in the financial crisis and identifies several core issues … for the link between accounting and financial stability. Our analysis suggests that, going into the financial crisis …' reporting incentives played a key role, which has important implications for bank supervision and the new expected loss model …

Bank regulators and academics have long conjectured the beneficial effects of smoothing in loan loss provisions (i … accounting regulators express concerns about its potential adverse impact on reporting transparency. Using the late 1990s … highlight the tradeoff between bank stability and transparency inherent in smoothing loan loss provisions – while proactive …