The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking

• 成果类型: Article
• 署名作者: Ballew, Hailey B.; Nicoletti, Allison; Stuber, Sarah B.
• 署名单位: Rice University; University of Pennsylvania; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4223
• 发表日期: 2022
• 页码: 2363-2371
• 关键词: financial reporting; accounting standards; risk-taking; Government stimulus; banks

摘要

This paper examines the consequences of the paycheck protection program (PPP) for bank risk-taking and whether the shift to the current expected credit loss (CECL) model moderates this effect. We find that the extent of a bank's PPP participation is associated with relatively greater changes in risk-taking outside of the PPP. We also show that this effect is concentrated in banks that have not early adopted the CECL model and banks with timelier pre-PPP loan loss provisions, suggesting that timelier loan loss recognition constrains risk-taking incentives. Overall, our findings provide insight into the indirect consequences of government stimulus programs administered through banks and the role of accounting in constraining bank risk-taking.