We study the effects of mark-to-market accounting (MTM) on banks' loan origination and retention decisions. We point out a conceptual shortcoming of MTM. Loan prices are informative in equilibrium but this price discovery is sustained by the good banks' costly retention. The attempt to exploit...

We bring to light a benefit of trade credit relationships in which large investment-grade firms borrow from their smaller suppliers despite the ability to secure less expensive financing elsewhere. The use of trade credit allows a firm, which is wary of a supply disruption, to indirectly acquire...

The Current Expected Credit Loss (CECL) standard took effect in 2020 during the onset of the unprecedented global pandemic. Proponents of CECL argue that the regulation can provide timelier provisions, while others are concerned about the potential for heightened reported earnings volatility. In...