Global Financial Crisis and Accounting Rules： The Implications of the New Exposure Draft （ED） Financial Instruments： Expected Credit Losses on the Evaluation of Banking Company Loans

During the financial crisis, the delayed recognition of credit losses on loans and other financial instruments was identified as a weakness in existing incurred loss model of impairment stated by International Accounting Standards （IAS） 39, because it is believed that this delay might generate pro-cyclical effects. In response to the recommendations of G20, Financial Crisis Advisory Group （FCAG）, and other international bodies, the International Accounting Standards Board （IASB） has undertaken, since 2009, as a part of the project to replace IAS 39, a project （partially shared with Financial Accounting Standards Board （FASB）） aimed at introducing an expected loss model of impairment. Within the scope of this subset project, the IASB has previously issued two exposure documents proposing models to account for expected credit losses： an exposure draft （ED） Financial Instrument： Amortized Cost and Impairment, published in November 2009, and a supplementary document （SD） Financial Instrument： Impairment, published jointly with the FASB in January 2011. However, neither of the two proposals received strong support from interested parties. Recently, the IASB, after the FASB＇s decision to withdraw from the joint project and to develop a separate expected credit loss model based on a single measurement approach consisting in the sole recognition of lifetime expected credit losses, published a third proposal--Ahe so-called expected credit losses model （ED/2013/3 Financial Instruments： Expected Credit Losses）.

An Analysis of the Loan Exit Gaming on Relationship Lending in China

This paper analyzes the loan exit on relationship lending in China. We define the relationship lending and analyze the value that both banks and borrowers will obtain in relationship lending, as well as some risks they will face, and then analyze the behaviors of loans exit with game theory. Our results suggest that, in general, relationship lending is helpful for the commercial banks and the enterprises to communicate information and enhance financing efficiency, while in the loan exit gaming, only when the decision of loan exit is made authentic promised by the banks, can the relationship lending effectively exert their positive function, and maintain the health cooperation between borrowers and lenders.

Bank loan information and information asymmetry in the stock market:evidence from China

In this study,we use bank loan information to construct proxies for corporate transparency and examine whether these measures reflect information asymmetry in the stock market.Our analysis is based on a novel dataset of stock transactions and bank loans of all publicly listed firms on the Shenzhen Stock Exchange,covering January 2008 to June 2013.We find that firms with outstanding loans have a lower level of information asymmetry in the stock market,whereas firms with defaulted loans have a higher level of asymmetry.Further evidence demonstrates that the effect of loan default on information asymmetry in the stock market is more pronounced when these loans are borrowed from joint-equity commercial banks or multiple banks and when the default occurs under inactive market conditions.Our results remain robust to a series of endogeneity and sensitivity tests and provide suggestive evidence of a close connection between the credit loan and stock markets.

The governance Effect of Heterogeneous Debts on Over-investment: Evidence from China

This paper sets out to observe the governance effect of the heterogeneous debts on the overinvestment behavior by Chinese companies.On this basis,the authors examined the different relationships between heterogeneous debts and over-investment.The study results indicate that various types of debt have different governance effect on over-investment.Trade credit can curb over-investment effectively and bank loans may exacerbate over-investment.

Corporate fraud and bank loans:Evidence from china

Receiving punishment from regulators for corporate fraud can affect financing contracts between a firm and its bank,as both the firm's credit risk and information risk increase after punishment By focusing on Chinese firms'borrowing behavior after events of corporate fraud,we find that firms'bank loans after punishment are not only significantly lower,but are also less than those for non-fraudulent firms.In addition,loan interest rates after punishment are not only higher than before,but also higher than those for their non-fraudulent counterparts.In addition,we find that corporate fraud indirectly destabilizes the"performance-bank loan"relationship.Our results suggest that corporate fraud negatively affects a firm's ability to source debt financing,which provides new evidence about the economic consequences of fraud.

The impact of XBRL on information asymmetry:evidence from loan contracting

This paper examines whether and how the adoption of eXtensible Business Reporting Language(XBRL)reduces information asymmetry in loan contracting.We hypothesize that the adoption of XBRL can enhance information dissemination and mitigate the information asymmetry problem between borrowers and lenders.Using a sample of 554 US bank loan contracts,we find that borrowers who adopt XBRL enjoy more favourable price and nonprice terms of bank loan contracts.Additional analyses indicate that the relations among XBRL adoption and bank loan price vary with loan structure.Overall,this research provides evidence that technology advancements such as XBRL reduce cost of bank loans by decreasing information asymmetry between borrowers and lenders.

The Progress Report of the World Bank Loaned China Tuberculosis Control Project

The progress of the World Bank loaned TB control project implemented from the second quarter of 1991 to the fourth quarter of 1993 was reported in this paper. In the past three years, 737 counties of the 12 provinces with the popula-

The Global Financial Crisis and Stock Market Reaction to Bank Loan Announcements

This study investigates how equity investors react to bank loan announcements in China using an event study methodology. By estimating the average Cumulative Abnormal Returns （CARs） over the event period and controlling for the impact of other factors such as borrower, lender and loan characteristics, we find that the overall reaction is negative. However, the results for the two sub-sample periods are different. After the onset of the Global Financial Crisis, the average CARs are no longer statistically different from zero, indicating higher lending standards and improvement in the quality of credit analysis of Chinese banks.

Foreign Banks Set Sights on Housing Loans

Having cleared all the hurdles to enter the market, locally incorporated foreign banks declare their intentions to dive into the personal housing loan business in China A battle is brewing between domestic and locally incorporated foreign banks over

Does Blacklisting Student Loan Defaulters Help Repayments to Banks?

Between 2005 and 2007,the China Development Bank offered 1.66 billion yuan($237 million) worth of loans to 243,000 stu- dents from poor families in central China’s Henan Province.

How Does Debt Structure Influence Stock Price Crash Risk?

This paper uses the financial data of Chinese listed firms to explore the relationship between the debt structure, which is measured as the ratio of trade credit to bank loan, and future stock price crash risk. The empirical results show that the ratio of trade credit to bank loan is positively associated with the firm-specific crash risk while a good institutional environment reduces this positive relationship. In addition, considering the firm＇s ownership type, the authors find that the positive relationship between the debt structure and crash risk is more significant in the SOEs.

Financing the price-setting newsvendor with sales effort

In this paper,we consider the financing issues in a supply chain where the capitalconstrained retailer should use limited funds to pay for both order and sales.The retailer decides the retail price,order quantity exante and sales effort expost,and he supports these operational activities by two financing sources:bank loan and trade credit.We illustrate that in this two-stage problem,the price-setting retailer’s equilibrium sales effort and retail price are both related to the market realization value and the retailer’s cash level.These two financing sources are both able to stimulate the retailer to promote sales.If the retailer’s cash level is reasonably high,both parties(supplier and retailer)benefit from trade credit.By contrast,if the retailer’s cash level is low,trade credit may discourage the retailer from sales promotion.Counterintuitively,our study shows that the retailer spends more on sales when the market is good than when it is bad.