Regulators frequently relax accounting rules during a financial crisis as means of regulatory forbearance. The new options provide banks with an opportunity for accrual-based increase in their capital. use such option helps reduce the costs government interventions bailouts and avoid dilution existing shareholders’ ownership rights. We examine introduction reclassification assets 2008 study pos...

Unconventional monetary policy measures like asset purchase programs aim to reduce certain securities' yield and alter financial institutions' investment behavior. These increase the market value of securities add their equity positions. We show that extent this recapitalization effect crucially depends on accounting valuation methods, country-level regulation, maturity structure. argue future ...

In the last two decades, central banks in Sub-Saharan African (SSA) countries have witnessed a trend of recapitalization policy for commercial banks, and many more are bracing up to undertake same reform. This has raised debates on whether how it affects competitiveness banks. Nevertheless, empirical evidence remains sparse inclusive, especially SSA countries. It is this premise that study, the...

This paper tests for changes in firms' production and pricing decisions in four industries in which firms have sharply increased their financial leverage. The analysis of product price and quantity data show that industry product market decisions are associated with capital structure. In three industries, output is negatively associated with the average industry debt ratio. In the one industry ...