Real effects of lagged guidance from prudential regulators on CECL

• 成果类型: Article
• 署名作者: Basu, Riddha; Roychowdhury, Sugata; Sinha, Kirti
• 署名单位: George Washington University; Northwestern University; University of Texas System; University of Texas Dallas
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101; 1879-1980
• DOI: 10.1016/j.jacceco.2025.101808
• 发表日期: 2025
• 页码: 101808
• 关键词: Real effects; debt contracting; loan loss provisions; CECL; accounting standards; Prudential regulation; investments; financial constraints; RELATIONSHIP BANKING; private debt; IMPACT; INVESTMENT; reputation; ratings; shocks

摘要

We examine the impact of lagged guidance from prudential regulators on new accounting standards in the context of the Current Expected Credit Loss (CECL) standard. We refer to the period following CECL's 2016 pronouncement but prior to the 2018 guidance from prudential banking regulators on the standard as the lagged guidance (LG) period. We find that during the LG period, banks reduce loan amounts and increase loan spreads for affected loans (Term Loan As, or TLAs) relative to unaffected loans (Term Loan Bs, or TLBs). Following the 2018 regulatory guidelines, however, banks increase loan amounts and reduce loan spreads on TLAs relative to TLBs. The stricter TLA terms during the LG period coincide with decreased investments by corporate borrowers dependent exclusively on TLAs, especially those that borrow frequently and are financially constrained. The results indicate that delayed guidance from industry regulators on CECL had spillover effects in the economy.