We survey research on banks׳ financial accounting. After providing a brief background of the theoretical models and accounting and regulatory institutions underlying the bank accounting literature, we review three streams of empirical research. Specifically we review studies associating bank...

We provide large sample evidence that credible hedge commitments reduce the agency costs of debt and that accounting conservatism enhances hedge commitments. We examine 2,338 bank loans entered into by 263 mandatory derivative users that are contractually obligated by interest rate protection...