Market pricing of banks’ fair value assets reported under SFAS 157 since the 2008 financial crisis

Goh, Beng Wee; Li, Dan; Ng, Jeffrey; Yong, Keng Kevin Ow

doi:10.1016/j.jaccpubpol.2014.12.002

Cited by 150 publications

(170 citation statements)

References 18 publications

Supporting

Mentioning

138

Contrasting

Unclassified

Order By: Relevance

“…In contrast, Song et al (2010) illustrate that Level 1 and Level 2 assets are valued similarly, while Level 3 assets are valued the least. Goh et al (2009) findings also reveal that the value relevance of net fair value assets decreases over the first three quarters of 2008, whereas Song et al (2010) find that the value relevance of fair values does not decrease over this period. Furthermore, Song et al (2010) Find evidence that the value relevance of fair values does not decrease as markets become less liquid may be particularly important to standard setters who are interested in the market's perception of the reliability of fair values during an economic crisis.…”

Section: Regression Resultsmentioning

confidence: 87%

“…The results of the regression analysis reported by (Kolev, 2008;Goh et al, 2009;Song et al, 2010). Song et al (2010) indicates that the valuations of Level 1 and Level 2 assets and liabilities close to one and negative one, these papers find valuations of Level 1 and Level 2 net assets significantly less than one.…”

Section: Regression Resultsmentioning

confidence: 90%

“…Kolev (2009) uses a changes specification, allowing tests of the value relevance of Level 3 realised and unrealised gains/losses versus net purchases and transfers. Goh et al (2009) document that investors value Level 2 net assets less than Level 1 net assets but do not value Level 2 and Level 3 net assets differently. In contrast, Song et al (2010) illustrate that Level 1 and Level 2 assets are valued similarly, while Level 3 assets are valued the least.…”

Section: Regression Resultsmentioning

confidence: 99%

“…Specifically, the extent of a higher capital ratio and a higher-quality do allow a bank to enhance the value-relevance of it is level 2 and level 3 net assets close to their book values. Goh et al (2009) also document that the value relevance of net fair value assets decreases over the first three quarters of 2008 during an economic crisis.…”

Section: Empirical Analyses: the Evidencementioning

confidence: 87%

“…In other words, the evolution in the valuation of level 1 assets is more difficult to pin down, with Kolev (2008) reporting a fall in their valuation and Goh et al (2009) being more comprehensive as well as different empirical models, which document that the value relevance of net fair value assets decreases over the first three quarters of 2008, whereas Song et al (2010) find that the value relevance of fair values does not decrease over this period.…”

Section: Empirical Analyses: the Evidencementioning

confidence: 99%

See 4 more Smart Citations

Fair-Value Accounting’s Role in the Global Financial Crisis?: Lessons for the Future

Masoud¹,

Daas²

2014

IJMS

View full text Add to dashboard Cite

This paper debates how fair-value accounting (FVA) that were deeply affected by the global financial crisis. The global financial crisis started in advanced economies spreading to emerging markets and low-income countries. Thus, it has been affected in the middle of 2007 and into 2009, which have examined the role of FVA in the financial crisis. This paper is used the value-relevance of fair-value reported under FAS 157 that estimates assets and liabilities in terms of a simple theoretical and empirical analysis literature framework. This empirical study proposed is a global crisis that not a normal cyclical crisis of capitalism. Also, it requires a change in the management policy to be tackled with new regulatory frameworks for financial institutions in order to stimulate economic activities. In other words, FVA may have amplified the crisis. Future research is needed to meet up-to-date information regarding the nature of capital markets and financial institutions. This requires a new theory of economics; for instance, a change from equilibrium theory to reflexivity theory which requires a change in the underlying model of the economic activity framework. Therefore, this study has concluded a new theory of the change of equilibrium to reflexivity that led to develop the model in the framework of the economic activity.

show abstract

Section: Regression Resultsmentioning

confidence: 87%

Section: Regression Resultsmentioning

confidence: 90%

Section: Regression Resultsmentioning

confidence: 99%

Section: Empirical Analyses: the Evidencementioning

confidence: 87%

Section: Empirical Analyses: the Evidencementioning

confidence: 99%

See 3 more Smart Citations

Fair-Value Accounting’s Role in the Global Financial Crisis?: Lessons for the Future

Masoud¹,

Daas²

2014

IJMS

View full text Add to dashboard Cite

show abstract

Managerial learning and the informational role of fair values

Elbannan

2022

J Corp Accounting Finance

View full text Add to dashboard Cite

This paper examines whether fair values provide useful information for management decision making. This study uses a sample of 9733 bank-quarters, covering 2009-2016 to examine the relation. Empirical evidence suggests that fair values, particularly of liability items, affect for stock price informativeness for managers. The effects, however, depend on the account type (asset or liability) and the investment area. Information contained within level 3 items, in general, benefits management learning. Evidence also suggests that accounting discretion and macroeconomic uncertainty largely disrupt management learning from reported fair values and that the fair value effects on management learning persists over the long-run.

show abstract

Does Religiosity Matter to Value Relevance? Evidence from U.S. Banking Firms

Chourou

2018

J Bus Ethics

View full text Add to dashboard Cite

I examine whether religiosity is positively associated with the valuation multiples investors assign to fair valued items that are prone to managerial bias. Using a sample of U.S. banking firms, I find that the value relevance of net assets that are hard to verify is higher for firms located in more religious areas than for those located in less religious areas. Moreover, I hypothesize and find that audit quality and firm information environment quality moderate the positive association between religiosity and value relevance. I perform several robustness checks. First, I rule out several alternative explanations to my results. Second, I address the concern that my results suffer from an omitted correlated variable problem. Third, I show that my results hold for firms located in Urban as well as Rural areas.

show abstract

Market pricing of banks’ fair value assets reported under SFAS 157 since the 2008 financial crisis

Cited by 150 publications

References 18 publications

Fair-Value Accounting’s Role in the Global Financial Crisis?: Lessons for the Future

Fair-Value Accounting’s Role in the Global Financial Crisis?: Lessons for the Future

Managerial learning and the informational role of fair values

Does Religiosity Matter to Value Relevance? Evidence from U.S. Banking Firms

Contact Info

Product

Resources

About