Accounting Discretion of Banks During a Financial Crisis
Object category:
Elektronische Ressource
Person/Institution:
Publisher:
International Monetary Fund
Place of publication:
Washington, D.C
Date:
2009
Extent, illustration, format:
Online-Ressource (41 p)
Language:
Englisch
Providing institution:
Additional information
Abstract:
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks'' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks'' balance sheets offer a distorted view of the financial health of the banks
Object text:
Laeven, Luc
Online-Ausg.
Online-Ausg.
Access and usage options
Contact
Universität Erfurt
Forschungsbibliothek Gotha
Schloss Friedenstein
Schlossplatz 1
99867 Gotha
+49 361 737-5540
bibliothek.gotha(at)uni-erfurt.de
Forschungsbibliothek Gotha
Schloss Friedenstein
Schlossplatz 1
99867 Gotha
+49 361 737-5540
bibliothek.gotha(at)uni-erfurt.de
Administrative details
Created:
2023-04-12
Last changed:
2023-01-26
Added to portal:
2023-04-12
Feedback
Our data sets are in constant development. If you have additional information about this object or discovered an error, please write to us. Information on privacy policy