Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Journal of Accounting & Economics

The Harmonization of Lending Standards within Banks through Mandated Loan-Level Transparency

By: Jung Koo Kang, Maria Loumioti and Regina Wittenberg-Moerman
  • Format:Print
ShareBar

Abstract

We explore whether the introduction of transparent reporting rules increases credit standard harmonization within a bank. We exploit the new loan-level reporting rules imposed on banks that borrow from the European Central Bank using repurchase agreements collateralized by their asset-backed securities. We compare credit terms of similar mortgages issued by a bank across a country's regions and find that harmonization increases following the adoption of the new reporting rules. Learning and regulatory scrutiny constitute mechanisms underlying this economic effect. We also show that harmonization leads to more favorable lending terms to borrowers and higher loan quality for banks. Overall, these findings suggest that transparent reporting rules incentivize banks to improve their internal decision-making and thereby reduce regional divergence in their credit standards.

Keywords

Transparency; External And Internal Reporting; Credit Term Harmonization; Regulatory Scrutiny; Banks and Banking; Credit; Financial Reporting; Governing Rules, Regulations, and Reforms; Learning

Citation

Kang, Jung Koo, Maria Loumioti, and Regina Wittenberg-Moerman. "The Harmonization of Lending Standards within Banks through Mandated Loan-Level Transparency." Journal of Accounting & Economics 72, no. 1 (August 2021): 101386.
  • Find it at Harvard
  • Purchase

About The Author

Jung Koo Kang

Accounting and Management
→More Publications

More from the Authors

    • June 2025
    • Faculty Research

    Fair Value Accounting for Debt Securities and Loan Assets

    By: Jung Koo Kang, Krishna G. Palepu and Charles CY Wang
    • May 2025
    • Faculty Research

    Initial Financial Statements at Blank Corporation: Bridging Content and Commerce

    By: Jung Koo Kang, Panje Jayden Kim and David Allen
    • 2025
    • Faculty Research

    Data-driven Technologies and Local Information Advantages in Small Business Lending

    By: Wilbur Chen, Jung Koo Kang and Aditya Mohan
More from the Authors
  • Fair Value Accounting for Debt Securities and Loan Assets By: Jung Koo Kang, Krishna G. Palepu and Charles CY Wang
  • Initial Financial Statements at Blank Corporation: Bridging Content and Commerce By: Jung Koo Kang, Panje Jayden Kim and David Allen
  • Data-driven Technologies and Local Information Advantages in Small Business Lending By: Wilbur Chen, Jung Koo Kang and Aditya Mohan
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.