Did Fair-Value Accounting Contribute to the Financial Crisis
Bibliographic Data
| ID | 4029976 |
|---|---|
| Authors | Christian Laux (0000-0003-2580-7313, Vienna University of Economics and Business, Vienna, Austria.), Christian Leuz (0000-0003-4370-6209, University of Chicago Booth School of Business, Chicago, Illinois; National Bureau of Economic Research, Cambridge, Massachusetts.) |
| Year | 2010 |
| Volume | 24 |
| Issue | 1 |
| Pages | 93-118 |
| Publication date | 2010-02-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic Perspectives (JOURNAL) |
| Journal identifiers | ISSN: 0895-3309 • E-ISSN: 1944-7965 |
| Publisher | American Economic Association (PUBLISHER • US) |
| DOI | 10.1257/jep.24.1.93 |
| OpenAlex | W2150133863 |
| Language | EN |
| Citations received | 10 |
| References cited | 20 |
The recent financial crisis has led to a major debate about fair-value accounting. Many critics have argued that fair-value accounting, often also called mark-to-market accounting, has significantly contributed to the financial crisis or, at least, exacerbated its severity. In this paper, we assess these arguments and examine the role of fair-value accounting in the financial crisis using descriptive data and empirical evidence. Based on our analysis, it is unlikely that fair-value accounting added to the severity of the 2008 financial crisis in a major way. While there may have been downward spirals or asset-fire sales in certain markets, we find little evidence that these effects are the result of fair-value accounting. We also find little support for claims that fair-value accounting leads to excessive write-downs of banks' assets. If anything, empirical evidence to date points in the opposite direction, that is, toward the overvaluation of bank assets during the crisis
Accounting information system · Balance sheet · Business · Economics · Fair market value · Fair value · Financial accounting · Financial crisis · Macroeconomics · Mark-to-market accounting · Market value · Auditing, Earnings Management, Governance · Banking stability, regulation, efficiency · Credit Risk and Financial Regulations · Accounting
The Impact of Fair Value Accounting on the Crisis in Banking Sector of Eu and USA
Deciphering the Liquidity and Credit Crunch 2007-2008
La medición del riesgo en eventos extremos. Una revisión metodológica en contexto
Accounting for Profit and the History of Capital
Sovereignty, Law, and Money
Accounting for whom? The financialisation of the environmental economic transition
Accounting, Governance and the Crisis
Monetary Policy, Held-to-Maturity Securities, and Uninsured Deposit Withdrawals
IFRS 9 transition effect on equity in a post bank recovery environment
The unintended consequences of regulatory import
| Unique citing works | 10 |
|---|---|
| Citations per year | 0,59 |
| Citation span | 2009 - 2026 (18) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 7 |