Details

Autor(en) / Beteiligte

• ERTAN, AYTEKIN
• LOUMIOTI, MARIA
• WITTENBERG-MOERMAN, REGINA

Titel

Enhancing Loan Quality Through Transparency: Evidence from the European Central Bank Loan Level Reporting Initiative

Ist Teil von

• Journal of accounting research, 2017-09, Vol.55 (4), p.877-918

Ort / Verlag

Chicago: Wiley Subscription Services, Inc

Erscheinungsjahr

2017

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• We explore whether transparency in banks' securitization activities enhances loan quality. We take advantage of a novel disclosure initiative introduced by the European Central Bank, which requires, as of January 2013, banks that use their asset-backed securities as collateral for repo financing to report securitized loan characteristics and performance in a standardized format. We find that securitized loans originated under the transparency regime are of better quality with a lower default probability, a lower delinquent amount, fewer days in delinquency, and lower losses upon default. Additionally, banks with more intensive loan level information collection and those operating under stronger market discipline experience greater improvement in their loan quality under the new reporting standards. Overall, we demonstrate that greater transparency has real effects by incentivizing banks to improve their credit practices.