Many have argued that financial statements created under an accounting model that measures financial instruments at fair value would not fairly represent a bank's business model. In this study we examine whether financial statements using fair values for financial instruments better describe...

This paper investigates what we can learn from the financial crisis about the link between accounting and financial stability. The picture that emerges ten years after the crisis is substantially different from the picture that dominated the accounting debate during and shortly after the crisis....

When liquidity plays an important role as in times of financial crisis, asset prices in some markets may reflect the amount of liquidity available in the market rather than the future earning power of the asset. Mark-to-market accounting is not a desirable way to assess the solvency of a...

The aim of this study is to investigate which factors influence loan quality in Greece. In this context, it is examined the effect of various accounting and macroeconomics indices to loans loss provisions (LLP) and loans loss reserves (LLR) ratios. The empirical analysis is carried out at both...

Several studies have addressed, with conflicting results, the issue of procyclical effects of loan loss provisions in the past. More recently, the weak performance of incurred loss models in the financial crisis has given rise to a new debate on the sound design of credit risk provisioning...

Motivated by recent studies that show female CFOs are more risk averse than male CFOs when making various corporate decisions, we examine whether banks take into consideration the gender of CFOs when pricing bank loans. We find that in our sample, firms under the control of female CFOs on...

This paper's objective is to study the relationship between bank credit risk and financial performance and the contribution of risky lending to lower bank profitability and liquidity. The sample data comes from the Mergent Online database, which stores ownership, executive, and financial...

During the late 1990's, the SEC alleged that banks were overstating their loan loss allowances to establish cookie jar reserves and issued new guidance on allowance estimation designed to improve financial reporting quality. We show that banks' estimation methods changed in response to the...

This study examines the sources of credit risk associated with asset securitizations and whether credit rating agencies and the bond market differ in their assessment of this risk. Measuring credit risk using credit ratings, we find the securitizing firm's credit risk is positively related to...

This paper provides a more direct test of the superior information hypothesis of banks and informs a long standing policy debate about whether banks serve a special information role in the economy. I circumvent the self-selection bias that contaminated prior studies by obtaining bank loan...