Do accounting measurement regimes matter? A discussion of mark-to-market accounting and liquidity pricing

Using a model with banking and insurance sectors, Allen and Carletti show that marking-to-market interacts with liquidity pricing to exacerbate the likelihood of financial contagion between the two sectors. In this discussion, I lay out the main ingredients of their model and explain how they interact with liquidity pricing to generate financial contagion. I then discuss some limitations of their model and propose an interesting extension.

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Year of publication:	2008
Authors:	Sapra, Haresh
Published in:	Journal of Accounting and Economics. - Elsevier, ISSN 0165-4101. - Vol. 45.2008, 2-3, p. 379-387
Publisher:	Elsevier

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005492559