Does Fair Value Accounting Exacerbate the Procyclicality of Bank Lending?

This study evaluates whether fair value accounting accelerates the bank lending process. Many theoriesand researches consider fair value accounting as an essential factor in the lending process of banks.However, in this study and the continuation of Xie (۲۰۱۶), we were ready for sale bonds and expired bondsafter comparing the effect of fair value accounting and the effect. The target population included all bankslisted on the Tehran Stock Exchange with more than ۱۰ years of experience, including ۷ banks. Thesebanks were evaluated by census and their data from ۲۰۰۶ to ۲۰۱۶ were analyzed and processed. Eviewssoftware and regression analysis were used to analyze the data. The results showed that fair valueaccounting predicts ۲۰.۹% of banks' lending rates. Finally, the results showed that fair value accounting isa good indicator for predicting bank lending.

Keywords:

Lending , Fair Value Accounting , Ready-To-Sell Securities , Past Due Securities