Did SFAS 166/167 Decrease Information Asymmetry of Securitizing Banks?
Financial Review, Financial Review, Vol. 55, Issue 4, pp. 557-581, 2020
43 Pages Posted: 26 Jul 2015 Last revised: 5 Nov 2020
Date Written: November 13, 2019
Beginning in 2010, mandated Financial Accounting Standards No. 166 and 167 (SFAS 166/167) changed the consolidation rules of securitization entities and required more information about their securitization activities. I find that securitizing banks experienced a decrease in information asymmetry from the pre- to the post-SFAS 166/167 periods, and that more visible securitizing banks are less sensitive to SFAS 166/167. These inferences are robust to a number of sensitivity analyses. This study is one of the first to provide evidence of the effects of SFAS 166/167 on the information asymmetry of securitizing banks.
Keywords: banks, regulations, securitizations, FAS 166, FAS 167, SFAS 166, SFAS 167, information asymmetry, disclosure
JEL Classification: D80, G21, G28, M41
Suggested Citation: Suggested Citation