Did SFAS 166/167 Decrease the Information Asymmetry of Securitizing Banks?
25 Pages Posted: 9 Oct 2020
Date Written: November 2020
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: Suggested Citation