Interplay between Accounting and Prudential Regulation

• 成果类型: Article
• 署名作者: Bertomeu, Jeremy; Mahieux, Lucas; Sapra, Haresh
• 署名单位: Washington University (WUSTL); Tilburg University; University of Chicago
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0705
• 发表日期: 2023
• 页码: 29-53
• 关键词: Capital requirements; risk-taking; to-market; inconsistency; TRANSPARENCY; disclosure; banking

摘要

We develop a model in which accounting information and prudential regulation interact to affect banks' incentives to originate loans. Prudential regulators impose capital requirements to prevent banks from taking excessive risk. However, regulators cannot commit to ex ante efficient intervention and, instead, respond to ex post accounting information. We show that capital requirements and accounting measurement are substitutes when considered separately. By contrast, when considered jointly, accounting measurement and capital requirements are complementary tools that affect the level and efficiency of credit decisions. Comparative statics link capital requirements, quality of accounting information, and regulatory intervention to credit market conditions. An upshot of our analysis is that by appropriately optimizing the information from expected loss models, prudential regulators may design looser capital requirements to spur more bank lending.