Bank External Financing and Early Adoption of SFAS 133

Sophia I-Ling Wang ()
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Sophia I-Ling Wang: Department of Accounting, Mihaylo College of Business and Economics, California State University, Fullerton, 800 N. State College Blvd., Fullerton, CA 92831, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2018, vol. 21, issue 03, 1-40

Abstract: This study examines whether and how US bank holding companies that early adopted Statement of Financial Accounting Standards (SFAS) 133, “Accounting for Derivative Instruments and Hedging Activities,” experience changes in their external financing activities relative to banks that did not early adopt the standard. Consistent with predictions, the study shows that early adopters hold higher and experience greater changes in their leverage compared with nonearly adopters. In addition, early adopters experience greater shifts in weights of liabilities other than insured deposits in banks’ funding mix. This finding is consistent with banking literature which states that banks have shifted towards nondeposit debts to finance their balance sheet growth.

Keywords: Banks; capital structure; external financing; early adoption; derivatives and hedge accounting (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S0219091518500157

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