The effects of ratings disclosure by bank regulators

• 成果类型: Article
• 署名作者: Gopalan, Yadav
• 署名单位: Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101438
• 发表日期: 2022
• 关键词: LOAN LOSS PROVISIONS; voluntary disclosure; earnings management; REVOLVING-DOOR; INFORMATION; COMPETITION; QUALITY; IMPACT; bond

摘要

I examine how banks change their risk management practices in response to the private disclosure of regulatory ratings that summarize bank risk-taking. Upon ratings disclosure, affected banks increase the timeliness of their loan loss provisioning. These effects are concentrated among banks that lie below key rating thresholds and those headquartered in states with low competition. After ratings disclosure, deficient banks decrease commercial lending while shifting assets into cash. Overall, my findings highlight how performance measures produced and privately disclosed by a third party can influence actions within a firm. (c) 2021 Elsevier B.V. All rights reserved.