Accounting for financial stability: Bank disclosure and loss recognition in the financial crisis


Bischof, Jannis ; Laux, Christian ; Leuz, Christian



DOI: https://doi.org/10.2139/ssrn.3319542
URL: https://ub-madoc.bib.uni-mannheim.de/49608
Additional URL: https://ssrn.com/abstract=3319542
Document Type: Working paper
Year of publication: 2019
The title of a journal, publication series: ECGI Finance Working Paper
Volume: 445
Place of publication: Bruxelles
Publishing house: European Corporate Governance Institute
Publication language: English
Institution: Business School > ABWL u. Unternehmensrechnung (Bischof 2015-)
Subject: 650 Management
330 Economics
Abstract: This paper investigates what we can learn from the financial crisis about the link between accounting and financial stability. The picture that emerges ten years after the crisis is substantially different from the picture that dominated the accounting debate during and shortly after the crisis. Widespread claims about the role of fair-value (or mark-to-market) accounting in the crisis have been debunked. However, we identify several other core issues for the link between accounting and financial stability. Our analysis suggests that, going into the financial crisis, banks’ disclosures about relevant risk exposures were relatively sparse. Such disclosures came later after major concerns about banks’ exposures had arisen in markets. Similarly, banks delayed the recognition of loan losses. Banks’ incentives seem to drive this evidence, suggesting that reporting discretion and enforcement deserve careful consideration. In addition, bank regulation through its interlinkage with financial accounting may have dampened banks’ incentives for corrective actions. Our analysis illustrates that a number of serious challenges remain if accounting and financial reporting are to contribute to financial stability.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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Bischof, Jannis ; Laux, Christian ; Leuz, Christian (2019) Accounting for financial stability: Bank disclosure and loss recognition in the financial crisis. ECGI Finance Working Paper Bruxelles 445 [Working paper]


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