1.

Record Nr.

UNINA9910957410503321

Autore

Scarlata Jodi

Titolo

Procyclicality and Fair Value Accounting / / Jodi Scarlata, Juan Sole, Alicia Novoa

Pubbl/distr/stampa

Washington, D.C. : , : International Monetary Fund, , 2009

ISBN

9786612842610

9781462383023

1462383025

9781452763194

1452763194

9781282842618

1282842617

9781451871876

1451871872

Edizione

[1st ed.]

Descrizione fisica

1 online resource (42 p.)

Collana

IMF Working Papers

Altri autori (Persone)

NovoaAlicia

SoleJuan

Disciplina

338.29346

Soggetti

Business cycles

Fair value - Accounting

Accounting

Banking

Banks and Banking

Banks and banking

Banks

Depository Institutions

Economic growth

Finance

Finance, Public

Finance: General

Financial Institutions and Services: Government Policy and Regulation

Financial institutions

Financial Instruments

Financial instruments

Financial Markets and the Macroeconomy

Financial reporting, financial statements

Financial statements

General Financial Markets: General (includes Measurement and Data)

Industries: Financial Services



Institutional Investors

Investment & securities

Investments: General

Loans

Macroeconomics

Micro Finance Institutions

Mortgages

Non-bank Financial Institutions

Pension Funds

Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)

Public Administration

Public financial management (PFM)

Public Sector Accounting and Audits

Securities

United States

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

Description based upon print version of record.

Nota di bibliografia

Includes bibliographical references.

Nota di contenuto

Contents; I. Introduction; II. Fair Value Accounting Through the Business Cycle; A. Fair Value Accounting And Its Application; 1. Selected U.S. Based Financial Institutions: Change in Level 1, 2, and 3 Assets; 2. Aggregate Fair Value Hierarchy, End-2007; III. Modeling FVA through the business cycle using simulations; A. Data and Modeling Assumptions; Tables; 1. Balance Sheet Representative U.S. And European Financial Institutions; 2. Parameter Values for Each Simulation; B. Simulation Results; 3. Equity-to-Assets Ratio Through The Business Cycle

4. Application of Fair Value by U.S. And European Banks, 2007 Figures; IV. Conclusions and Policy Recommendations; Policy proposals; 3. Simulation Of Full Fair Value; 4. Simulation Of Full Fair Value: Changes In Funding Conditions And Financial Market Distress; 5. Simulation Of Full Fair Value: International versus Retail-Oriented Banks; 6. Simulation Of Partial Fair Value; 7. Simulation Of Smoothing Techniques; 8. Yield Curves and Business Cycles; 9. Simulation Of Full Fair Value With Upward Sloping Yield Curve; V. References

Sommario/riassunto

In light of the uncertainties about valuation highlighted by the 2007-2008 market turbulence, this paper provides an empirical examination of the potential procyclicality that fair value accounting (FVA) could introduce in bank balance sheets. The paper finds that, while weaknesses in the FVA methodology may introduce unintended procyclicality, it is still the preferred framework for financial institutions. It concludes that capital buffers, forward-looking provisioning, and more refined disclosures can mitigate the procyclicality of FVA. Going forward, the valuation approaches for accounting, prudential measures, and risk management need to be reconciled and will require adjustments on the part of all parties.