The harmonization of lending standards within banks through mandated loan-level transparency

• 成果类型: Article
• 署名作者: Kang, Jung Koo; Loumioti, Maria; Wittenberg-Moerman, Regina
• 署名单位: Harvard University; University of Texas System; University of Texas Dallas; University of Southern California
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101386
• 发表日期: 2021
• 关键词: information-systems integration; price dispersion; credit; GROWTH

摘要

We explore whether the introduction of transparent reporting rules increases credit standard harmonization within a bank. We exploit the new loan-level reporting rules imposed on banks that borrow from the European Central Bank using repurchase agreements collateralized by their asset-backed securities. We compare credit terms of similar mortgages issued by a bank across a country's regions and find that harmonization increases following the adoption of the new reporting rules. Learning and regulatory scrutiny constitute mechanisms underlying this economic effect. We also show that harmonization leads to more favorable lending terms to borrowers and higher loan quality for banks. Overall, these findings suggest that transparent reporting rules incentivize banks to improve their internal decision-making and thereby reduce regional divergence in their credit standards. 0 2021 Elsevier B.V. All rights reserved.