Bank Runs and the Accounting for Illiquid Assets in Financial Institutions

Autor/inn/en	Meder, Anthony; Schwartz, Steven T.; Wu, Mark; Young, Richard A.
Titel	Bank Runs and the Accounting for Illiquid Assets in Financial Institutions
Quelle	In: Accounting Education, 23 (2014) 3, S.277-294 (18 Seiten)Infoseite zur Zeitschrift PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0963-9284
DOI	10.1080/09639284.2013.872349
Schlagwörter	Financial Services; Accounting; Banking; Business Administration Education; Case Method (Teaching Technique); Relevance (Education); Audits (Verification); Models + Suchen Sie Ihr Suchwort? Abrechnung; Buchführung; Buchhaltung; Bankgeschäft; Case method; Fallmethode; Relevance; Relevanz; Analogiemodell
Abstract	Financial services are an increasingly important sector in modern economies, yet many accounting and auditing texts focus on manufacturing and retailing. This teaching note describes the role of financial institutions in transforming long-term, difficult-to-sell assets into short-term bank accounts. This is referred to as liquidity transformation. The social benefits and risks of liquidity transformation are described. The social benefit occurs due to the increased liquidity provided by the bank to depositors. The risk comes in the form of a bank run, wherein difficult-to-sell assets cannot be redeemed in time to cover the rapid and unexpected withdrawals of depositors. The financial statements of a financial institution are presented and the issue of valuation is discussed. Finally, practical relevance for accounting students is enhanced by including discussions of historical precedents and of implications for financial reporting and auditing. (As Provided).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2020/1/01