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,...

This study provides evidence that hedge accounting information under Statement of Financial Accounting Standards (SFAS) 133, Accounting for Derivative Instruments and Hedging Activities, is related to rivals’ market entry decisions. Documenting accounting information’s relevance to...

Contracting parties (e.g., the firm and its supplier) have cost-reducing incentives to make investments which support the unique transactions between them. However, to the extent that one party may renege on its contractual obligations, the other party incurring the cost of the...

Contracting parties, such as the firm and its supplier, have cost-reducing incentives to make investments which support the unique transactions between them. However, to the extent that one party may renege on its contractual obligations, the other party incurring the cost of the...

In this study, we examine how banks' stock price crash risk is affected by recourse uncertainty embedded in securitizations. By recourse uncertainty, we mean the difficulty for equity market participants to assess the true extent of risk transfer between securitizing banks and investors in...

Health-insurance premiums account for a significant portion of the cost base of U.S. corporations. A recent study finds that health-insurance premiums increase for firms that experience positive profit shocks (Dafny 2010), suggesting that the U.S. health-insurance market is not perfectly...

The U.S. Consumer Financial Protection Bureau has accepted complaints about banks' financial products and services since 2011 and has released the complaint database to the public since 2013. We analyze the effectiveness of this public disclosure in protecting mortgage borrowers. We find a...