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, banks' disclosures about relevant risk exposures were...

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....

We study whether bank managers' use their discretion in estimating the allowance for loan losses (ALL) for efficiency or for opportunistic reasons. We do so by examining whether the use of this discretion relates to bank stability and bank risk taking, or whether it relates to earnings...

This study examines credit lending decision adjustments of executive board members of German banks following different levels of auditor materiality threshold disclosures. Based on an experimental research design, we find that if a materiality threshold, which is in line with current audit...

We use a sample of banks from 24 European countries to investigate whether the adoption of the Basel II Capital Accord in 2008 affects the market valuation of discretionary loan loss provisions (DLLPs). Although Basel II lowers the incentives of internal ratings- based (IRB) banks to recognize...

Since 1979, yields on new issues of long-term municipal debt have risen sharply both absolutely and in relation to yields on long-term corporate and U.S. Treasury debt. In contrast, yields on short-term municipal debt have risen only moderately and offer a relative bargain. Consequently, there...

I examine whether bank regulators and external auditors have conflicting effects on loan loss provision timeliness, an accounting choice associated with important economic consequences and a potential conflict between regulators and auditors. In the absence of the other group, auditors and...

This research paper studies the quality of own credit (OC) risk disclosures in European banks by analyzing their annual reports. By defining and applying a self-developed disclosure index that incorporates both the (i) relative quantity and (ii) richness of the information provided, it is found...

This paper examines regulators' optimal design for banks' expected credit loss impairment rules. Recognizing expected credit losses imposes market discipline and thus sound risk-taking ex ante (social gain) while it potentially distorts the bank's socially desirable liquidity provision ex...