
Banks bend rules in crises: IMF paper

Banks systematically inflated asset values and book capital through the use of malleable accounting techniques, finds a working paper published by the International Monetary Fund (IMF).
The paper, Accounting Discretion of Banks during a Financial Crisis, arrives at three conclusions. Using an event study methodology, it shows that banks with large exposures to mortgage-backed securities (MBS) reported large excess returns by taking a lax approach to fair value accounting rules.
Second, it proves
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