The aim of this paper is to examine the pros and cons of book and fair value accounting from the perspective of the theory of banking. We consider the implications of the two accounting methods in an overlapping generations environment. As observed by Allen and Gale (1997), in an overlapping...

The aim of this paper is to examine the pros and cons of book and fair value accounting from the perspective of the theory of banking. Weconsider the implications of the two accounting methods in an overlapping generations environment. As observed by Allen and Gale(1997), in an overlapping...