TY  - UNPD
A1  - Bischof, Jannis
A1  - Laux, Christian
A1  - Leuz, Christian
T1  - Accounting for financial stability : lessons from the financial crisis and future challenges
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 622
N2  - 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.
T3  - CFS working paper series - 622 
KW  - Banks
KW  - Financial crisis
KW  - Mark-to-market
KW  - Fair value accounting
KW  - Financial stability
KW  - Disclosure
KW  - Loan loss accounting
Y1  - 2019
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/43870
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-438703
IS  - December 2018
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -