Did SFAS 166/167 Decrease the Information Asymmetry of Securitizing Banks?

25 Pages Posted: 9 Oct 2020

See all articles by Seda Oz

Seda Oz

University of Waterloo - School of Accounting and Finance

Date Written: November 2020

Abstract

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, disclosure, FAS 166, FAS 167, information asymmetry, regulations, securitizations, SFAS 166, SFAS 167

JEL Classification: D80, G21, G28, M41

Suggested Citation

Oz, Seda, Did SFAS 166/167 Decrease the Information Asymmetry of Securitizing Banks? (November 2020). Financial Review, Vol. 55, Issue 4, pp. 557-581, 2020, Available at SSRN: https://ssrn.com/abstract=3707491 or http://dx.doi.org/10.1111/fire.12217

Seda Oz (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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