IDEAS home Printed from https://ideas.repec.org/a/taf/accfor/v33y2009i2p99-113.html
   My bibliography  Save this article

When it comes to the crunch: What are the drivers of the US banking crisis?

Author

Listed:
  • Eliot Heilpern
  • Colin Haslam
  • Tord Andersson

Abstract

This article considers how permissive regulatory conditions helped change the size and scope of the US mortgage market. Asset backed securitization facilitated an expansion of the US mortgage market and modified the structure of the value chain within which financial assets, risk and liquidity were managed. New sophisticated mortgage products, indulgent lending practices, loose credit assessment and flimsy documentation increased the probability of mortgage default in an economic downturn. US banks were not in a position to absorb mark-to-market losses on mortgage assets and goodwill impairment resulting from a credit crunch because they operate with narrow profit margins and a limited equity cushion in the balance sheet. This article questions the viability and sustainability of this banking business model.

Suggested Citation

  • Eliot Heilpern & Colin Haslam & Tord Andersson, 2009. "When it comes to the crunch: What are the drivers of the US banking crisis?," Accounting Forum, Taylor & Francis Journals, vol. 33(2), pages 99-113, June.
    • Handle: RePEc:taf:accfor:v:33:y:2009:i:2:p:99-113
    DOI: 10.1016/j.accfor.2009.03.001
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1016/j.accfor.2009.03.001
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1016/j.accfor.2009.03.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lewis, Mervyn K., 2012. "New dogs, old tricks. Why do Ponzi schemes succeed?," Accounting forum, Elsevier, vol. 36(4), pages 294-309.
    2. Chantziaras, Antonios & Dedoulis, Emmanouil & Grougiou, Vassiliki & Leventis, Stergios, 2020. "The impact of religiosity and corruption on CSR reporting: The case of U.S. banks," Journal of Business Research, Elsevier, vol. 109(C), pages 362-374.
    3. Ebrahim, M. Shahid & Jaafar, Aziz & Omar, Fatma A. & Salleh, Murizah Osman, 2016. "Can Islamic injunctions indemnify the structural flaws of securitized debt?," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 271-286.
    4. Andersson, Tord & Lee, Edward & Theodosopoulos, Grigorios & Yin, Ya Ping & Haslam, Colin, 2014. "Accounting for the financialized UK and US national business model," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 78-91.
    5. Sardar Ahmad & Saeed Akbar & Devendra Kodwani & Anwar Halari & Syed Zubair Shah, 2023. "Compliance or non‐compliance during financial crisis: Does it matter?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2348-2366, July.
    6. Grougiou, Vassiliki & Leventis, Stergios & Dedoulis, Emmanouil & Owusu-Ansah, Stephen, 2014. "Corporate social responsibility and earnings management in U.S. banks," Accounting forum, Elsevier, vol. 38(3), pages 155-169.
    7. Hatherly, David & Kretzschmar, Gavin, 2011. "Capital and income financialization: Accounting for the 2008 financial crisis," Accounting forum, Elsevier, vol. 35(4), pages 209-216.
    8. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    9. Rami Salem & Ernest Ezeani & Xi Song, 2023. "The relationship between religiosity and voluntary disclosure quality: a cross-country evidence from the banking sector," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 983-1023, April.
    10. Fargher, Neil & Zhang, John Ziyang, 2014. "Changes in the measurement of fair value: Implications for accounting earnings," Accounting forum, Elsevier, vol. 38(3), pages 184-199.
    11. Beisland, Leif Atle, 2014. "Equity valuation in practice: The influence of net financial expenses," Accounting forum, Elsevier, vol. 38(2), pages 122-131.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:accfor:v:33:y:2009:i:2:p:99-113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/racc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.