In this paper I analyze whether banks recognize problem loans loans with substandard and doubtful regulatory risk classifications in a timely manner. I argue that this is important to understand because substandard and doubtful rated loans are loans that should be evaluated for loan loss...

This paper considers the association between regulatory management evaluations and bank accounting returns and risk. For robustness, we estimate our tests using a matched sample with equal numbers of banks with and without weak regulatory management evaluations. We document a strong association...