Did SFAS 166/167 decrease the information asymmetry of securitizing banks?

Beginning in 2010, mandated Financial Accounting Standards No. 166 and 167 (SFAS 166/167) changed the consolidation rules of securitization entities and required more information about their securitization activities. I find that securitizing banks experienced a decrease in information asymmetry fro...

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Bibliographic Details
Published inThe Financial review (Buffalo, N.Y.) Vol. 55; no. 4; pp. 557 - 581
Main Author Oz, Seda
Format Journal Article
LanguageEnglish
Published Knoxville Wiley Subscription Services, Inc 01.11.2020
Blackwell Publishing Ltd
Subjects
Accounting
Asymmetry
banks
Banks (Finance)
D80
disclosure
FAS 166
FAS 167
G21
G28
information asymmetry
M41
regulations
Securitization
securitizations
SFAS 166
SFAS 167
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Summary:Beginning in 2010, mandated Financial Accounting Standards No. 166 and 167 (SFAS 166/167) changed the consolidation rules of securitization entities and required more information about their securitization activities. I find that securitizing banks experienced a decrease in information asymmetry from the pre‐ to the post‐SFAS 166/167 periods, and that more visible securitizing banks are less sensitive to SFAS 166/167. These inferences are robust to a number of sensitivity analyses. This study is one of the first to provide evidence of the effects of SFAS 166/167 on the information asymmetry of securitizing banks.
Bibliography:This paper is based on the author's dissertation at the New York University. The author greatly appreciates the invaluable guidance and support from her dissertation committee members: Yakov Amihud, Mary Billings, Michael Jung, Joshua Ronen (chair), and Stephen Ryan. An earlier version of this paper was circulated under the title: “Did FAS 166/167 Improve the Transparency of Securitizing Banks?”.
ISSN:0732-8516
1540-6288
DOI:10.1111/fire.12217