| Preface |
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iii | |
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ix | |
| Glossary |
|
xi | |
| Summary |
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xiii | |
| Acknowledgments |
|
xix | |
| Abbreviations |
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xxi | |
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1 | (6) |
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Arguments and Counterarguments About FVA |
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2 | (1) |
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Systemic Risk, Accounting Standards, and Prudential Regulation |
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3 | (1) |
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3 | (1) |
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4 | (1) |
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Organization of This Report |
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5 | (2) |
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Chapter Two Background: The Debate over FVA and HCA |
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7 | (10) |
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What Are the Sources of Deep Disagreement over FVA and HCA? |
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7 | (1) |
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What Do Consumers of Accounting Information Really Want to Know? |
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8 | (1) |
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Do Different Types of Users of Accounting Information Want to Know Different Things? |
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9 | (2) |
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How Are Business Models and Investment Time Frames Relevant? |
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11 | (1) |
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Asset Volatility: Error or Information? |
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12 | (1) |
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Is Either Accounting Approach More Subject to Misinformation? |
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13 | (2) |
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15 | (2) |
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Chapter Three Systemic Risk and Accounting Approaches |
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17 | (10) |
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17 | (2) |
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Liquidity Pricing and Economic Models of Contagion |
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19 | (1) |
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The Theoretical Relationship Between FVA, Liquidity Pricing, and Risk Contagion: The Industrial Bonds Example |
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20 | (1) |
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More About Risk Contagion Under the Allen and Carletti Model |
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21 | (1) |
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Lessons About Risk Contagion and FVA |
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21 | (2) |
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How Might HCA Contribute to Systemic Risk Among Banking Institutions? |
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23 | (2) |
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25 | (2) |
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Chapter Four Accounting Standards and Prudential Regulation |
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27 | (16) |
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Bank Prudential Regulators and Capital Requirements: The Basics |
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27 | (1) |
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Bank Capital Ratios in Theory and Practice |
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28 | (3) |
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How Can Banks Respond When Facing a Capital Shortfall? |
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31 | (2) |
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How Can Banks Respond to an FVA-Induced Capital Shortfall? |
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33 | (2) |
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What Are the Implications of Bank Capital Requirements, FVA, and HCA for Systemic Risk? |
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35 | (2) |
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Empirical Evidence on FVA and Risk Contagion |
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37 | (3) |
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40 | (3) |
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Chapter Five Lessons from Historical Episodes Involving Accounting Standards, Systemic Risk, and Financial Crisis |
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43 | (12) |
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The Savings and Loan Crisis: Forerunner of 2008? |
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44 | (1) |
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44 | (1) |
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The Origins of the S&L Crisis |
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44 | (1) |
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Deregulation and Oversight Problems Compounded Risk Accumulation in the S&L Crisis |
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45 | (1) |
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Enter HCA and Regulatory Forbearance: When Are Asset Impairments Truly "Permanent"? |
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46 | (1) |
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The Resolution of the S&L Crisis |
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47 | (1) |
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48 | (1) |
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The Less Developed Country Debt Crisis |
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48 | (1) |
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48 | (1) |
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The Origins of the LDC Crisis |
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49 | (1) |
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Regulatory Intervention in the LDC Crisis |
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49 | (1) |
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Resolution of the LDC Crisis: Why Did Forbearance Succeed? |
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50 | (1) |
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What Role Did HCA Play in Forbearance? |
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51 | (1) |
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Point of Contemporary Comparison: Forbearance on Greek Debt in the Eurozone |
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51 | (1) |
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52 | (3) |
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Chapter Six Implementation and Risk: The Challenges to Doing FVA and HCA Well |
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55 | (10) |
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FVA, HCA, and Challenges in Firm-Level Risk Management |
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55 | (2) |
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Audit Integrity and Auditability of FVA and HCA Information |
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57 | (2) |
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Valuation Problems Posed by Complex Financial Institutions and Transactions |
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59 | (1) |
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When Is a Liquidation Event Relevant to Determining Asset Value? |
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60 | (1) |
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Endogeneity in Asset Valuation as a Reflection of Market Power |
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61 | (1) |
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62 | (3) |
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Chapter Seven Conclusion and Policy Options |
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65 | (8) |
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65 | (1) |
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Despite Their Differences, FVA and HCA Also Enjoy Some Underlying Similarities |
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66 | (1) |
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Moving Beyond the FVA-HCA Debate |
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67 | (1) |
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Prudential Regulation Is a Linchpin That Connects Valuation Approaches with Systemic Risk |
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67 | (1) |
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Conclusion and Policy Options |
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68 | (1) |
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68 | (1) |
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69 | (1) |
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70 | (3) |
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An Overview of HCA and FVA |
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73 | (8) |
| References |
|
81 | |
