Measuring Fair Value When Markets Malfunction: Evidence from the Financial Crisis

26 Pages Posted: 30 Mar 2017

See all articles by Amir Amel-Zadeh

Amir Amel-Zadeh

University of Oxford - Said Business School

Geoff Meeks

University of Cambridge - Judge Business School

Date Written: March 30, 2017

Abstract

In this paper we focus on fair value measurements in the Financial Crisis and its (continuing) aftermath. We consider different ways of measuring fair value; and we use the experience of economies under stress, and where markets deviate significantly from textbook models of symmetric information and perfect competition, to trace some perverse economic consequences of fair value measurement choices prescribed by accounting standard setters. We draw on anecdotal and case evidence from the banking crisis and its aftermath for the wider economy. The discussion focuses particularly on banks’ balance sheets and then on pension liabilities across all sectors.

Keywords: Fair Value, Financial Crisis, Relevance, Reliability, Market Failure, Pension Liabilities

JEL Classification: D43, D62, D82, G14, G21, G23, G28, L13, M40, M41

Suggested Citation

Amel-Zadeh, Amir and Meeks, Geoff, Measuring Fair Value When Markets Malfunction: Evidence from the Financial Crisis (March 30, 2017). Available at SSRN: https://ssrn.com/abstract=2943314 or http://dx.doi.org/10.2139/ssrn.2943314

Amir Amel-Zadeh (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Geoff Meeks

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0) 1223 764226 (Phone)
+44 (0) 1223 339701 (Fax)

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