Accounting discretion of banks during a financial crisis /

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 mo...

Πλήρης περιγραφή

Λεπτομέρειες βιβλιογραφικής εγγραφής
Κύριος συγγραφέας: Laeven, Luc
Άλλοι συγγραφείς: Huizinga, Harry
Μορφή: Επιστημονικό περιοδικό
Γλώσσα:English
Έκδοση: Washington, D.C. : International Monetary Fund, 2009.
Σειρά:IMF Working Papers; Working Paper ; No. 2009/207
Διαθέσιμο Online:Full text available on IMF
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245 1 0 |a Accounting discretion of banks during a financial crisis /  |c Luc Laeven, Harry Huizinga. 
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300 |a 1 online resource (41 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a 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. 
538 |a Mode of access: Internet 
700 1 |a Huizinga, Harry. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2009/207 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2009/207/001.2009.issue-207-en.xml  |z IMF e-Library