Fair Value Accounting Villain Or Innocent Victim Exploring The Links Between Fair Value Accounting Bank Regulatory Capital And The Recent Financial Crisis
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Fair Value Accounting Villain Or Innocent Victim Exploring The Links Between Fair Value Accounting Bank Regulatory Capital And The Recent Financial Crisis
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Author :
language : en
Publisher: DIANE Publishing
Release Date :
Fair Value Accounting Villain Or Innocent Victim Exploring The Links Between Fair Value Accounting Bank Regulatory Capital And The Recent Financial Crisis written by and has been published by DIANE Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on with categories.
Law Bubbles And Financial Regulation
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Author : Erik F. Gerding
language : en
Publisher: Routledge
Release Date : 2013-12-04
Law Bubbles And Financial Regulation written by Erik F. Gerding and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-12-04 with Business & Economics categories.
Financial regulation can fail when it is needed the most. The dynamics of asset price bubbles weaken financial regulation just as financial markets begin to overheat and the risk of crisis spikes. At the same time, the failure of financial regulations adds further fuel to a bubble. This book examines the interaction of bubbles and financial regulation. It explores the ways in which bubbles lead to the failure of financial regulation by outlining five dynamics, which it collectively labels the "Regulatory Instability Hypothesis." . The book concludes by outlining approaches to make financial regulation more resilient to these dynamics that undermine law.
The Routledge Companion To Financial Accounting Theory
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Author : Stewart Jones
language : en
Publisher: Routledge
Release Date : 2015-05-22
The Routledge Companion To Financial Accounting Theory written by Stewart Jones and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-05-22 with Business & Economics categories.
Financial accounting theory has numerous practical applications and policy implications, for instance, international accounting standard setters are increasingly relying on theoretical accounting concepts in the creation of new standards; and corporate regulators are increasingly turning to various conceptual frameworks of accounting to guide regulation and the interpretation of accounting practices. The global financial crisis has also led to a new found appreciation of the social, economic and political importance of accounting concepts generally and corporate financial reporting in particular. For instance, the fundamentals of capital market theory (i.e. market efficiency) and measurement theory (i.e. fair value) have received widespread public and regulatory attention. This comprehensive, authoritative volume provides a prestige reference work which offers students, academics, regulators and practitioners a valuable resource containing the current scholarship and practice in the established field of financial accounting theory.
Risk Management Post Financial Crisis
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Author : Jonathan A. Batten
language : en
Publisher: Emerald Group Publishing
Release Date : 2014-10-03
Risk Management Post Financial Crisis written by Jonathan A. Batten and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-10-03 with Business & Economics categories.
Risk Management Post Financial Crisis: A Period of Monetary Easing provides further insights into postcrisis developments in the global economic and financial environment including advances in measuring and reporting risk and liquidity. Contributions come from leading banks, international organisations and worldrenowned universities.
Did Basel Iii Miss The Point The Role Of Ifrs S Other Comprehensive Income During The Financial Crisis
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Author : Kenneth Born
language : en
Publisher: Anchor Academic Publishing
Release Date : 2017-01-09
Did Basel Iii Miss The Point The Role Of Ifrs S Other Comprehensive Income During The Financial Crisis written by Kenneth Born and has been published by Anchor Academic Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-01-09 with Business & Economics categories.
The broad consensus before the recent financial crisis was that the so called fair value accounting (FVA) improves transparency contrary to the historical cost model. Since 2008, the discussion has been on the root cause of the crisis, which lessons can be gleaned from it and how making the same mistakes again can be avoided. Basel III was implemented in order to improve the regulatory environment and was the response of regulators and politicians to public pressure and suspicions raised by the bail out programmes for banks. Consequently, an until then inconceivable number of new regulations and regulatory bodies were introduced. FVA was also blamed as part of the cause of the recent financial crisis. Available-for Sales (AfS) securities represent a major component of bank balance sheet asset. Gains and losses of AfS-positions are recorded within the Other Comprehensive Income (OCI). The OCI includes items which are not recognized (IAS 1.7) in income statements but increase or decrease a bank’s equity. The items also include income and expenses from Available-for-Sale positions (AfS) in accordance with IAS 39. On October 13th, 2008, an amendment to IAS 39 was published by IASB. This amendment did authorize the reclassification of assets. This amendment clearly demonstrates the influence of FVA on the value of assets of banks that apply IFRS. The main objective of this book is to verify the influence of OCI and whether the new regulations sufficiently capture this critical factor. Regulators should ensure that unrealized profits do not result in a capital drain. One way to assure this is to make OCI subject to a prudential filter and to deduct it from regulatory capital, which was the case until CRR became effective on January 1st, 2014 (CEBS guideline 2004). Basel III is even less strict than Basel II in that regard. Article 26(1) CRR clearly states that CET1 items must be recognized only in case they are really available to the financial institution for “unrestricted and immediate use to cover risks or losses as soon as these occur”. Nevertheless, with the introduction of the CRR, the prudential filter for positions that caused the financial crisis and led to poor capitalization of banks was not strengthened but actually removed. At present, CRR does not envisage any filter for unrealized gains parked in OCI.
Handbook Of Key Global Financial Markets Institutions And Infrastructure
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Author :
language : en
Publisher: Academic Press
Release Date : 2012-12-17
Handbook Of Key Global Financial Markets Institutions And Infrastructure written by and has been published by Academic Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-17 with Business & Economics categories.
Understanding twenty-first century global financial integration requires a two-part background. The Handbook of Key Global Financial Markets, Institutions, and Infrastructure begins its description of how we created a financially-intergrated world by first examining the history of financial globalization, from Roman practices and Ottoman finance to Chinese standards, the beginnings of corporate practices, and the advent of efforts to safeguard financial stability. It then describes the architecture itself by analyzing its parts, such as markets, institutions, and infrastructure. The contributions of sovereign funds, auditing regulation, loan markets, property rights, compensation practices, Islamic finance, and others to the global architecture are closely examined. For those seeking substantial, authoritative descriptions and summaries, this volume will replace books, journals, and other information sources with a single, easy-to-use reference work. Substantial articles by top scholars sets this volume apart from other information sources Diverse international perspectives result in new opportunities for analysis and research Rapidly developing subjects will interest readers well into the future
Accounting Conservatism In Spanish Banks And The Drop In The Supply Of Loans During The Financial Crisis
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Author : Inmaculada Díaz Sánchez
language : es
Publisher: Ed. Universidad de Cantabria
Release Date : 2015-02-03
Accounting Conservatism In Spanish Banks And The Drop In The Supply Of Loans During The Financial Crisis written by Inmaculada Díaz Sánchez and has been published by Ed. Universidad de Cantabria this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-02-03 with Banks and banking categories.
El reconocimiento tardío de las pérdidas por deterioro en el valor de los activos es considerado por muchos como uno de los factores determinantes de la crisis financiera desencadenada tras el hundimiento del banco norteamericano Lehman Brothers. Se acusa al sistema de información contable de no proporcionar al mercado información que permitiera evaluar a tiempo las pérdidas de valor de determinados activos bancarios, estimando por exceso los ratios de capital de las principales instituciones financieras internacionales. Cuando finalmente los bancos comenzaron a reconocer contablemente las pérdidas latentes en los balances, la crisis se hallaba en un estadio muy avanzado, con tasas de morosidad al alza y caídas generalizadas en el margen de negocio. La disminución subsiguiente del capital generó una mayor disminución del crédito disponible para empresas y familias y, por ende, un mayor deterioro de la coyuntura macroeconómica. Utilizando una amplia muestra de entidades financieras ubicadas en 54 países para el periodo 1997-2009, este trabajo identifica los determinantes fundamentales del grado de conservadurismo en el reconocimiento de las pérdidas por parte de la banca internacional. En concreto, se utiliza un indicador de conservadurismo propuesto previamente en la literatura (Beatty y Liao, Journal of Accounting and Economics, 2011), y se evalúa el efecto sobre el mismo de variables ligadas a a) el sistema de supervisión bancaria, b) la normativa sobre capital mínimo, c) la estructura de gobierno de las entidades, y d) el grado de competencia del mercado nacional. Nuestros resultados sugieren que el conservadurismo contable es mayor en países con regímenes de supervisión más estrictos y normativa bancaria más exigente, tanto en lo relativo al ratio de capital como en lo referente a las limitaciones en el ejercicio de determinadas actividades financieras. Los bancos cotizados tienden a ser más conservadores que los no cotizados. Finalmente, el grado de competencia en el sector aparece positivamente correlacionado con el nivel de conservadurismo.
Fair Value Accounting
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Author : E. Menicucci
language : en
Publisher: Palgrave Pivot
Release Date : 2014-12-22
Fair Value Accounting written by E. Menicucci and has been published by Palgrave Pivot this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-12-22 with Business & Economics categories.
The 2008 financial crisis has turned a spotlight on the role of financial reporting in periods of economic downturn. In analysing the financial crisis, many commentators have attributed blame to fair value accounting (FVA) because of the pro-cyclical effect it potentially introduces in banks' financial statements. This book discusses how FVA affects financial reporting during a financial crisis. It provides an in-depth analysis of the key benefits and negatives of FVA, and discusses the controversial practice of trade-offs with historical cost accounting (HCA). It provides an overview of the principles and applications of FVA, and explains its impact on banks' financial statements. Investigating the effect of FVA on the volatility of earnings and regulatory capital in European banks, the book asks whether incremental volatility is indeed reflected in bank share prices. It examines empirical evidence to quantify the role that FVA may have played in times of stress in the banking sector, both in Europe and elsewhere. Fair Value Accounting explores the criticism FVA has received despite its perceived merits, and summarizes the various opposing views of parties in this major policy debate, which has involved banking and accounting regulators from across the globe.
Fair Value Accounting Historical Cost Accounting And Systemic Risk
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Author : Michael D. Greenberg
language : en
Publisher:
Release Date : 2013
Fair Value Accounting Historical Cost Accounting And Systemic Risk written by Michael D. Greenberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Fair value categories.
Fair value accounting (FVA) refers to the practice of updating the valuation of assets or securities on a regular basis, ideally by reference to current prices for similar assets or securities established in the context of a liquid market; historical cost accounting (HCA) instead records the value of an asset as the price at which it was originally purchased. In the wake of the 2008 financial crisis, conflicting arguments have been made about the contributions of valuation approaches in triggering the crisis. This report investigates and clarifies the relationship between these two accounting approaches and risks to the financial system. The authors examine the risk implications of FVA and HCA in the various situations in which each is used; assess the role that these accounting approaches have played historically in financial crises, including the 2008 financial crisis, the savings and loan crisis of the 1980s, and the less developed country debt crisis of the 1970s; and explore insights about systemic risk that can be gleaned from better understanding the accounting approaches. The authors find that FVA was probably not a primary driver of the 2008 crisis. Moreover, they suggest that neither FVA nor HCA is objectively "better" than the other. Instead, both accounting approaches can provide useful information for different contexts when applied rigorously, but when they are implemented poorly or when regulatory oversight is weak, both FVA and HCA can produce misleading information that can increase systemic risk across the financial sector. The authors conclude with a series of recommendations for how FVA and HCA, and the financial information that both methods generate, can be improved to better protect against systemic risk to the banking sector in the future.
Mark To Market And Fair Value Accounting
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Author : James W. Curtis
language : en
Publisher: Nova Science Publishers
Release Date : 2009
Mark To Market And Fair Value Accounting written by James W. Curtis and has been published by Nova Science Publishers this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Accounting categories.
This book focuses on Fair Value Accounting which is a market-based accounting system for determining the value of assets and liabilities. Since the mid-1970's, the Financial Accounting Standards Board (FASB), the accounting standard setter that derives its informal authority from the Securities an Exchange Commission (SEC), has gradually been moving the nation from an accounting system based entirely on historic cost-based measurements of assets and liabilities to one based in part on fair value. Its basic reasoning is that fair value accounting provides market-based information that is more meaningful to investors. In 2006, FASB released Financial Accounting Standards No. 157, which refined previous fair value directives to further define the concept and clarified how to value instruments. FAS 157 went into effect in late 2007, a period that coincided with the growing severity of the current sub-prime-based financial turmoil. The worsening crisis helped fuel opposition to FAS 157. Opponents, including insurance firms and banks, argued that FAS 157 and fair value accounting protocol exacerbated the effects of the financial crisis by forcing holders to severely write down distressed or illiquid assets, which were often mortgage-backed securities, to levels far below their "true economic values". This book consists of public domain documents which have been located, gathered, combined, reformatted, and enhanced with a subject index, selectively edited and bound to provide easy access.