Fair Value Disclosures By Bank Holding Companies
Download Fair Value Disclosures By Bank Holding Companies full books in PDF, epub, and Kindle. Read online free Fair Value Disclosures By Bank Holding Companies ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
| Author | : Elizabeth A. Eccher |
| Publisher | : |
| Total Pages | : |
| Release | : 2000 |
| Genre | : |
| ISBN | : |
This paper analyzes the fair value data disclosed by bank holding companies under SFAS 107 and addresses some of the issues raised in the debate on the relevance of fair value accounting. The paper finds that most banks reported fair value estimates that exceeded their book values as of December 31 1992. Although the book value of securities and loans combined is similar in magnitude to deposits the effect of these two assets on the fair value of equity is five times greater than that of deposits. In addition to any real economic reasons that may apply the larger effect on the asset side of the balance sheet could be due to ignoring the core deposit intangible in valuing deposit obligations. In addition the paper provides evidence on the value-relevance of fair disclosures over and above the information already disclosed in banks' financial statements. The historical cost financial signals that represent profitability loan quality growth capital size etc. explain about 48% of the cross-sectional variation in the market-to-book ratio whereas the fair value disclosures add another 13% to the regression R- squared. With respect to off-balance sheet hedging behavior the excess of fair value of book value of on- balance sheet items is found to be significantly negatively associated with the unrealized gains/losses on off-balance sheet instruments only when the fair value of net loans are excluded. This suggests that it is difficult to make inferences about effect hedging based on fair value disclosures.
| Author | : Renee E. Weiss |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
The SEC's Division of Corporate Finance sent “Dear CFO” letters to certain registrants in 2008 requesting voluntary disclosures to improve transparency of Level 3 fair value measures and valuation of financial instruments in inactive or illiquid markets. We expect these bank holding companies were among the companies that the Division of Corporate Finance targeted. We consider the discussion points from the Dear CFO letters to identify the disclosures to analyze in this study. We find that disclosures about valuation techniques and the use of broker quotes or prices from pricing services are associated with increased information asymmetry and disclosures about the use of market indices or illiquidity adjustments are associated with decreased information asymmetry. When interacted with Level 3 assets, disclosures about changes in valuation techniques intensify the positive relation between Level 3 assets and information asymmetry and disclosures about asset-backed securities mitigate the positive relation between Level 3 assets and information asymmetry. Our study provides insight about the types of disclosures that impacted information asymmetries during the financial crisis. However, this setting of uncertainty and use of a small sample size may limit the ability to generalize these inferences to other time periods or other financial firms.
| Author | : Mr.Luc Laeven |
| Publisher | : International Monetary Fund |
| Total Pages | : 43 |
| Release | : 2009-09-01 |
| Genre | : Business & Economics |
| ISBN | : 1451873549 |
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.
| Author | : KPMG Peat Marwick |
| Publisher | : |
| Total Pages | : 31 |
| Release | : 1993 |
| Genre | : Bank holding companies |
| ISBN | : |
| Author | : Christian Kuiate |
| Publisher | : |
| Total Pages | : |
| Release | : 2014 |
| Genre | : Banks and banking |
| ISBN | : |
I examine whether and how the improvements in fair value disclosures resulting from the adoption of Statement of Financial Accounting Standard No. 157, Fair Value Measurement,s affect banks’ investment decisions. Using a sample of the largest one hundred publicly-traded bank holding companies, I find that, SFAS 157 does not affect the extent to which banks invest in high or low liquidity risk securities. Further cross-sectional analyses reveal that, following the adoption of SFAS 157m banks with high (low) funding liquidity needs reduce (increase) their holdings of high liquidity risk securities. These findings are consistent with the improved fair value disclosures contributing to mitigating the risk shifting incentives of banks with high funding liquidity needs and having no effect on a liquidity risk arbitrage strategy for banks with low funding liquidity needs. Consistent with the risk overhang hypothesis, I also find that banks with high funding liquidity needs use their discretion in fair value measurements to conceal the losses on their investment securities.
| Author | : Gauri Bhat |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
In this paper, I examine the relations between risk management disclosures, governance, and the market pricing of the fair value gains and losses (FVGL) for US commercial bank holding companies (banks). I find that banks with strong corporate governance disclose more about their risk management practices and that the market pricing of the FVGL increases with the level of disclosure. The disclosure's effect on the market pricing of the FVGL is more pronounced for banks during periods of crisis, for banks with risky assets, and for banks with poor performance. Further analysis shows that subcategories of disclosure have different roles to play under different risk conditions. Overall, the evidence in this paper suggests that market participants perceive the FVGL of banks with high disclosure and strong corporate governance as more relevant and reliable. One potential interpretation is that disclosure aids market participants in evaluating the quality of the FVGL.
| Author | : United States. Department of the Treasury |
| Publisher | : |
| Total Pages | : 780 |
| Release | : 1991 |
| Genre | : Banking law |
| ISBN | : |
| Author | : Regis Bouther |
| Publisher | : |
| Total Pages | : 37 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Using quarterly data on FAS 157 fair value disclosures for US bank holding companies from 2008 to 2013, we test whether capital ratios and the effects of market discipline differ according to extent and nature of assets recognized under Level 3 standards. These standards offer management significant discretion for measuring fair values, potentially reducing bank transparency and affecting market perceptions about bank risk. We find limited evidence that capital ratios are lower at institutions engaging in Level 3 trading activities for given risk levels, consistent with opportunistic behaviour. We also find that market discipline, as measured by whether an institution has a US stock exchange listing or dependence on short-term, uninsured funding sources, is effective in moderating this behaviour. At these institutions capital ratios are higher, consistent with there being a direct (ex ante) disciplining effect on bank behaviour.
| Author | : D. M. Hawkins |
| Publisher | : Cambridge University Press |
| Total Pages | : 384 |
| Release | : 1982-04-22 |
| Genre | : Mathematics |
| ISBN | : 9780521243681 |
Multivariate methods are employed widely in the analysis of experimental data but are poorly understood by those users who are not statisticians. This is because of the wide divergence between the theory and practice of multivariate methods. This book provides concise yet thorough surveys of developments in multivariate statistical analysis and gives statistically sound coverage of the subject. The contributors are all experienced in the theory and practice of multivariate methods and their aim has been to emphasize the major features from the point of view of applicability and to indicate the limitations and conditions of the techniques. Professional statisticians wanting to improve their background in applicable methods, users of high-level statistical methods wanting to improve their background in fundamentals, and graduate students of statistics will all find this volume of value and use.
| Author | : Jongchan Park |
| Publisher | : |
| Total Pages | : 138 |
| Release | : 2004 |
| Genre | : |
| ISBN | : |
