Repurchase agreements are money market instruments that are used widely and for various purposes due to their simplicity and flexibility. The European repo market is quite concentrated, as 80% of the transactions is conducted be-tween the top 20 banks and 61.9% of the collaterals used in the...

Using a unique setting where stand-alone banks submit filings to bank regulators instead of the SEC, we examine the consequences of disclosure regulation in the hands of bank regulators. Consistent with theory, we find that bank regulators are less concerned about transparency than the SEC. Bank...

This paper analyzes troubled banks' use of accounting discretion and its interaction with regulatory intervention in a time of financial distress. We analyze impairment losses that Europe's largest banks recognized on Greek Government Bonds (GGB) during 2011, the time during which GGB were...

We find that that the Current Expected Credit Loss (CECL) standard would slightlydampen fluctuations in bank lending over the economic cycle. In particular, if the CECLstandard had always been in place, we estimate that lending would have grown more slowlyleading up to the financial crisis and...

IFRS 9 requires the recognition of expected credit losses from the inception of a financial instrument, resulting in so-called day-one losses. The incorporation of day-one losses caused considerable controversy among the IASB members and its constituents. With a focus on the constituents’...

This paper finds that the disclosure of supervisory actions by bank regulators is associated with changes in their enforcement behavior. Using a novel sample of enforcement decisions and orders (EDOs) and a change in the disclosure regime, we find that regulators issue more EDOs, intervene...

We develop a model to show how shareholder-creditor agency conflicts interact with accounting measurement rules to influence the design of bank capital regulation. Relative to a benchmark autarkic regime, higher capital requirements mitigate inefficient asset substitution, but exacerbate...

The Financial Accounting Standards Board (FASB) recently replaced the “incurred loss” (IL) model of reporting credit losses with the “current expected credit loss” (CECL) model to improve the timeliness of credit loss information for financial statement users. CECL requires entities to...

We present a theory of bank disclosure in which banks face both adverse selection and bank run risk. In our model, banks disclose information to reduce adverse selection in credit markets, but information disclosure can also trigger inefficient bank runs. We show that the level of disclosure...