Financial Accounting and Disclosure in Banking

Chapter in forthcoming 4th Edition of the Oxford Handbook of Banking

53 Pages Posted: 26 Oct 2023

See all articles by Anne Beatty

Anne Beatty

Ohio State University (OSU) - Department of Accounting & Management Information Systems

Michael Iselin

University of Minnesota - Twin Cities - Department of Accounting

Scott Liao

University of Toronto - Rotman School of Management

Date Written: October 24, 2023

Abstract

The rules governing financial accounting and disclosure in the banking industry often change in response to economic crises. This chapter reviews the recent literature in four areas of research that have been directly affected by both the recent string of bank failures in the United States and the Global Financial Crisis. These areas are fair value accounting, loan loss provisioning, accounting quality and monitoring mechanisms, and stress test disclosures. These rule changes in response to crises often also serve as natural experiments where researchers use difference-in-differences analyses to identify the effect of rule changes. Because of the importance of the policy implications of these studies, we also discuss recent developments in econometrics relating to this research design. Throughout the chapter we offer potentially fruitful avenues for future research related to each of these areas.

Keywords: Accounting, CECL, Fair Value, Accounting Quality, Stress Tests, Disclosure

JEL Classification: M41, M48, G21, G01

Suggested Citation

Beatty, Anne L. and Iselin, Michael and Liao, Wei-Yi (Scott), Financial Accounting and Disclosure in Banking (October 24, 2023). Chapter in forthcoming 4th Edition of the Oxford Handbook of Banking, Available at SSRN: https://ssrn.com/abstract=4611592 or http://dx.doi.org/10.2139/ssrn.4611592

Anne L. Beatty

Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States

Michael Iselin (Contact Author)

University of Minnesota - Twin Cities - Department of Accounting ( email )

271 19th Avenue South
Room 645 Mgt. Econ. Building
Minneapolis, MN 55455
United States

Wei-Yi (Scott) Liao

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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