Delayed Expected Loss Recognition and the Risk Profile of Banks

  title={Delayed Expected Loss Recognition and the Risk Profile of Banks},
  author={Robert M. Bushman and Kenan-Flagler},
  • Robert M. Bushman, Kenan-Flagler
  • Published 2011
Policy makers and regulators argue that loan loss accounting can potentially reinforce procyclical effects of bank capital regulation. Banks that delay recognition of expected loan losses (DELR) create an overhang of unrecognized expected losses that carry forward to future periods. Further, we hypothesize that DELR can reduce bank transparency, increasing investors’ uncertainty about a bank’s intrinsic value and impeding the bank’s ability to raise equity capital in downturns. Expected loss… CONTINUE READING
Highly Cited
This paper has 20 citations. REVIEW CITATIONS

From This Paper

Figures, tables, and topics from this paper.

Explore Further: Topics Discussed in This Paper


Publications referenced by this paper.
Showing 1-10 of 31 references

Financial Intermediary Balance Sheet Management

T. Adrian, H. S. Shin
Working paper Princeton University February • 2011
View 4 Excerpts
Highly Influenced

Regulatory capital ratios, loan loss provisioning and procyclicality.

A. Beatty, S. Liao
Journal of Accounting and Economics • 2011
View 20 Excerpts
Highly Influenced

ILLIQUIDITY AND STOCK RETURNS : Cross-Section and Time-Series Effects

Yakov Amihud
View 11 Excerpts
Highly Influenced

An adverse selection model of bank asset and liability management with implications for the transmission of monetary policy

J. Stein
RAND Journal of Economics • 1998
View 4 Excerpts
Highly Influenced

CoVaR, Fed Reserve Bank of New York Staff Reports

T. Adrian
Brunnermeier, • 2011

Liquidity and Leverage

T. Adrian, H. S. Shin
Journal of Financial Intermediation, • 2010
View 1 Excerpt

Manufacturing Tail Risk: A Perspective on the Financial Crisis of 2007-09,Foundations and Trends®

V. Acharya, T. Cooley, M. Richardson, I. Walter
in Finance, • 2010

Risk and Liquidity

H. S. Shin
View 2 Excerpts

Similar Papers

Loading similar papers…