We investigate the economic consequences of the implementation of a particular aspect of Basel III in the U.S. Specifically, the Basel III proposal and the corresponding U.S. rule (hereafter referred to as the removal of the AOCI filter) to make the inclusion of unrealized fair value gains and...

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...

Using an international sample of 222 banks from 41 countries, this study examines whether the fair value option (FVO) affects earnings volatility. Prior empirical studies associate higher levels of earnings volatility with fair value accounting (Barth et al. 1995; Hodder et al. 2006). In contrast, I...

This study examines whether the application of the fair value option (FVO) induces different levels of earnings volatility during the time period from January 2006 until July 2007 using an international sample of 227 banks from 42 countries. Although fair value accounting is generally believed...

The current financial crisis has revived the debate surrounding fair value accounting especially in the case of illiquid markets and for assets that lack marketability. Many analysts argue that it was issuance of FASB 157 (ASC 820) and the use of fair value accounting that caused the financial...

In light of the financial meltdown that followed the bankruptcy of Lehman Brothers in the fall of 2008, there is considerable debate in the financial community on the appropriate accounting methodology used to value financial assets. In fact, many analysts on Wall Street argue that much of the...