The economic consequences of extending the use of fair value accounting in regulatory capital calculations: A discussion

• 成果类型: Editorial Material
• 署名作者: Laux, Christian
• 署名单位: Vienna University of Economics & Business
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2016.10.005
• 发表日期: 2016
• 关键词: FINANCIAL CRISIS; banks; contribute

摘要

When the Federal Reserve, following Basel III, proposed removing the accumulated other comprehensive income (AOCI) filter that shields regulatory capital from unrealized gains and losses on available-for-sale (AFS) debt securities, it triggered fierce opposition. The topic is at the heart of the debate about the role of fair value accounting for financial stability. Chircop and Novotny-Farkas (2016) investigate banks' stock price reaction and investment behavior around news events up to the announcement of the final decision. I focus on the question of whether their evidence is sufficiently strong to convince either side in the debate. (C) 2016 Elsevier B.V. All rights reserved.