Post-2008-crisis bank reforms : studies on the real effects of loan loss accounting and the role of banks as information intermediaries
department or school: Business, Sauder School of
department or school: Accounting, Division of
data provider: DSpace
degree campus: UBCV
creator: Yang, Hsiang-Chieh
issued: 2021-11-08T16:46:56Z
issued: 2021
related degree: Doctor of Philosophy - PhD
degree grantor: University of British Columbia
description: This thesis examines the consequences of two post-2008 financial crisis bank reforms in two studies. The first study explores the consequences of a new accounting rule for recognizing loan losses, the current expected credit loss model (CECL). CECL requires banks to expense their expected credit losses when a loan is issued, rather than when an event occurs that could make the loan uncollectable, as required by CECL’s predecessor accounting standard. Requiring earlier recognition of loan losses is likely to require banks to prepare more regulatory capital, decreasing their willingness to lend. Empirically, I find that following the approval of CECL, more capital-constrained banks reduce their loan growth rates. The reduced loan growth is stronger for real estate loans, which typically have a longer term to maturity, and for banks operating under a more lenient regulator. Using county-level loan origination data, I also find that more capital-constrained banks originate fewer small business loans. One key takeaway of this study is that when evaluating the effects of a new accounting change, policymakers should also consider the changes in economic behaviors that occur before the effective date of the change, rather than only focusing on the time after it becomes effective. In the second study, we examine the consequences of the Volcker Rule, which prohibits banks from conducting proprietary trading. The Volcker Rule aims to reduce the likelihood of future financial crises by discouraging banks from taking on too much risk. However, prior research finds that corporate bond liquidity (i.e., the ease of trading public bonds) has decreased after the Volcker Rule. This study utilizes the Volcker Rule as a bond liquidity shock to investigate whether the loss of bond liquidity motivates bond issuing firms to increase their voluntary disclosures. Using a difference-in-difference design, we find that bond issuers are more likely to increase their management guidance after the…
aggregated CHO: https://circle.library.ubc.ca/rest/handle/2429/80156
note: POST-2008-CRISIS BANK REFORMS: STUDIES ON THE REAL EFFECTS OF LOAN LOSS ACCOUNTING AND THE ROLE OF BANKS AS INFORMATION INTERMEDIARIES by Hsiang-Chieh Yang A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Business Administration) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) November 2021 © Hsiang-Chieh Yang, 2021 ii The following individuals certify that they have read, and recommend to the Faculty of Graduate and Postdoctoral Studies for acceptance, the dissertation entitled: Post-2008-Crisis Bank Reforms: Studies on the Real Effects of Loan Loss Accounting and the Role of Banks as Information Intermediaries submitted by Hsiang-Chieh Yang in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administration Examining Committee: Joy Begley, Associate Professor, Accounting and Information Systems, UBC Supervisor Sandra Chamberlain, Associate Professor, Accounting and Information Systems, UBC Supervisory Committee Member Ira Yeung, Assistant Professor, Accounting and Information Systems, UBC Supervisory Committee Member Giovanni Gallipoli, Professor, Economics, UBC University Examiner Hernan Ortiz-Molina, Associate Professor, Finance, UBC University Examiner Additional Supervisory Committee Members: Ralph Winter, Professor, Strategy and Business Economics, UBC Supervisory Committee Member iii Abstract This thesis examines the consequences of two post-2008 financial crisis bank reforms in two studies. The first study explores the consequences of a new accounting rule for recognizing loan losses, the current expected credit loss model (CECL). CECL requires banks to expense their expected credit losses when a loan is issued, rather than when an event occurs that could make the loan uncollectable, as required by CECL’s predecessor accounting standard. Requiring earlier recognition of loan losses is likely to require banks to pre…
has type: Thesis/Dissertation
date issued: 2022-05
is shown at: 10.14288/1.0403339
language: eng
degree discipline: Business Administration - Accounting
provider: Vancouver : University of British Columbia Library
publisher: University of British Columbia
rights: Attribution-NonCommercial-NoDerivatives 4.0 International
rights URI: http://creativecommons.org/licenses/by-nc-nd/4.0/
scholar level: Graduate
contributor: Begley, Joy
type: Text
identifier URI: http://hdl.handle.net/2429/80156