...Aytekin Ertan ABSTRACT This paper examines lending effects of European banks switching to an expected credit loss (ECL) model under IFRS 9. I find evidence that ECL transition deteriorates the credit landscape for SMEs—as risky, opaque, and bank-dependent borrowers. Post-ECL, affected banks...

...Jing Chen; Yiwei Dou; Stephen G. Ryan; Youli Zou ABSTRACT In the wake of the financial crisis, policymakers expressed the concern that the incurred loss model delays loan loss recognition to economic stress periods and thereby exacerbates banks’ lending contraction during these periods. Addressing...

... switching to quarterly financial disclosures. Consistent with market discipline enhancing lending practices, these results are stronger in regimes with weaker depositor insurance and external monitoring, and in those with stronger capital markets. We also find that banks that provide quarterly financial...

... a negative effect on lenders' willingness to lend to a firm with renewal options. However, we also show that disaggregating the capitalized optional renewal periods from the fixed-term lease obligation mitigates some of the negative effects of the proposed approach, particularly when disaggregation occurs...