CECL对银行贷款有何影响

FinanceandEconomicsDiscussionSeries

FederalReserveBoard,Washington,D.C.

ISSN1936-2854(Print)ISSN2767-3898(Online)

HowDidCECLAffectBankLending?

BenRanish,CindyM.Vojtech

2026-066

HowDidCECLAffectBankLending?*

BenRanisht

andCindyM.Vojtech‡

August2026

Abstract

Adoptionofthecurrentexpectedcreditlosses(CECL)methodologyforloanlossprovisioningsignificantlyalteredhowbanksrecognizeloanlossesintheircapitalcalculations.Becausecapitalisamorecostlyfundingsourceforbanks,theaccountingchangeaffectsbanks’costoffundingloans.UsingvariationinthetimingandeffectofCECLimplementationacrossfirmsandloantypes,thispaperfindsthatloanlossallowanceshaveasimilarcausaleffectoncreditsupplyascapitalrequirements.Withinoursample,theeffectofCECLadoptiononloanallowancesreducedloangrowthbyapproximately77basispointsannuallyintheyearsfollowingadoption.WefindnosignificanteffectofCECLoncapitaldistributions.

JEL:G21G28M41M48

Keywords:currentexpectedcreditlosses(CECL)methodology;banklending;loanlossprovi-sioning

*Declarationsofinterest:none.TheviewspresentedinthispaperreflecttheviewsoftheauthorsanddonotreflecttheviewsoftheBoardofGovernorsoftheFederalReserveSystemoritsstaff.WethankourBoardcolleaguesforseveralusefulconversationsonCECL,especiallyJoseBerrospide,SarahChae,AnyaKleymenova,BertLoudis,SashaPechenik,RobertSarama,JamesWang,andHelenXu.WealsothankoursummerinternSamuelRoss.

tDivisionofSupervisionandRegulation,BoardofGovernorsoftheFederalReserveSystem.20thStreetandConstitutionAvenueNW,Washington,D.C.20551.E-mail:

Ben.Ranish@

.

‡CorrespondingAuthor:DivisionofFinancialStability,BoardofGovernorsoftheFederalReserveSystem.20thStreetandConstitutionAvenueNW,Washington,D.C.20551.E-mail:

Cindy.M.Vojtech@

.

1

1Introduction

Howbanksmeasurepossibleloanlossesaffectsthesizeandtimingofearningsbecauseloanlossprovisionsreduceearningsand,therefore,capital.Becausecapitalisacostlierfundingsourceforbanks,changestoloanlossaccountingcouldaffectlendingjustasachangeincapitalrequirementsmight.Thispaperusesarequiredchangeinloanlossaccountingmethodstoexploretherelationshipbetweenloanlossallowancesandlendinggrowth.

OnJanuary1,2020,mostlargebanksintheUnitedStateswererequiredtoadoptthecurrentexpectedcreditlosses(CECL)methodologyforloanlossprovisioning,andallremainingbankswererequiredtoadoptitthreeyearslater.UnderCECL,banksneedtoestablishallowancessufficienttocoverexpectedlossesovertheentireloancontracthorizon.Incomparison,thepreviousincurredlossmodel(ILM)approachrequiredallowancesonlyforprobablelossesasofthereportingdate.Consequently,underCECL,lossprovisionsaremadeearlierinaloan’slifecycle,beforesignsofcreditdeteriorationemerge,andthelevelofallowancesisgenerallyhigher,dependingontheloancharacteristics.Inaddition,theCECLmethodologyrequiresprovisionstoreflectchangesinexpectedfuturecreditlossesassociatedwiththemacroeconomy,leadingtosignificantchangestoprovisionsaroundturningpointsintheeconomiccycle.Asaresult,theeffectofCECLislikelytodependontheeconomicenvironmentaswell.Therefore,ourempiricalapproachesandconclusionscarefullyconsidertheeconomicdisruptionfromthecoronavirusdisease2019(COVID-19)pandemic,whichemergedshortlyafterCECL’sadoptionbythelargestbanks.

Toanalyzetheeffectofloanlossaccountingonlending,wecompare2020CECLadopters(earlyadopters)with2023adopters(lateadopters)usingpublicregulatorydatabetween2016:Q1and2024:Q2.Thesebankgroupsaredifferentbyconstruction:Largepubliccompaniesareearlyadopters,andprivate,generallysmallercompanies,arelateadopters.Thispapertrimsthepaneltodroptheverylargeandsmallbankstocreateasampleofbanksthatareoperationallymoresimilar.WealsoexcludelendingassociatedwiththeSmallBusinessAdministration’sPaycheckPro-tectionProgram,introducedtosupportthepandemiceconomy.Tofurtheraddressconcernsaboutpotentialconfoundingduetodifferentialexposuretothepandemicdisruptions,ourapproachescon-

2

trolfordifferencesinlocalareaemploymentconditionsandexposuretoregionalmacroeconomic

trends.

ToidentifyeffectsofCECL,weusevariationinCECLadoption’simpactovertime,acrossfirms,andbetweenloanproducts.Wealsousemultipleapproachesincludingdifferences-in-differences,instrumentalvariables(IV),andsyntheticcontrolstocontrolforvariouspotentialsourcesofcon-founding.Ourconclusionsaredrawnfromconsiderationoftheseapproachesandrobustnesstests.WhileotherpapershavestudiedtheeffectofCECLonlending,ourrangeofempiricalapproachesismorecomprehensive,andourpreferredinstrumentalvariableapproachtiesthecausalloanlossallowanceeffectofCECLmoredirectlytoitseffectonbankcapital.Inaddition,thispreferredapproachusesvariationintheimpactofCECLatadoptiononJanuary1,2020,whichoccurredwellbeforetheseveredisruptionofCOVID-19waswidelyanticipated.

1

Ouranalysisstartssimplewithadifference-in-differencesapproachtoshowthatadoptionoftheCECLmethodologyhasadifferentsizedeffectonallowancesacrossthedifferentloantypes,bothforearlyandlateadopters.However,theestimatedeffectonloangrowthandallowancesdonotconsistentlygoinoppositedirections,asmightbeexpectedgivenCECL’simpactoncapital.Becausetheevidenceattheloantypelevelisweak,weuseapproachesthatmakeuseofadditionalsourcesofvariationinCECL’seffectonallowances.

ThroughuseofIVbasedonthesizeoftheadoptioneffect,wecandirectlyassessthelinkbetweenloanallowancesandlending.OurpreferredIVapproachusesfirms’day-oneCECLadoptioneffectasasourceofvariation.Thisapproachsuggeststhataonepercentagepointincreaseinallowancecoverage–theratioofloanlossallowancestoloans–decreaseslendingbyapproximately0.85percentperquarter.Extrapolatingfromthiseffectandconsideringthe24basispointeffectofCECLadoptiononallowancecoveragewithinoursampleofbanks,CECLadoptionresultedina77basispointdeclineinannualloangrowth.Thisdeclineismoderatelysignificantrelativetoaggregateannualloangrowth,whichaveragedabout6.4percentinoursampleofbanks.Incontrast,we

1ForlaterCECLadopters,theadoptiondateofJanuary1,2023occursaftereconomicconditionshadlargelynormalized.

3

findnostatisticallysignificanteffectofallowancesonbanks’capitaldistributionsintheformofcommonstockdistributionsorsharerepurchases.Incombination,theseestimatessuggestthattheshocktoallowancesisaccommodatedprimarilybyreducedlending.

Forfurtherevidencethatregulatorycapitalconstraintsarethemechanismbehindthemeasuredeffect,wetestwhetherthelendingresponsetoallowancesvarieswiththeextenttowhichcapitalrequirementsareaconstraintforthebank.Wefindthattheeffectofchangesinallowancesonloangrowthissignificantlystrongerforthemostcapitalconstrainedbanksthanitisfortheleastconstrained,withtheeffectsizedecreasingbyaboutone-thirdoftheaverageforeachstandarddeviationincreaseinexcesscapital.

Wefurthertesttherobustnessofourresultstoreasonablevariationsinthetestingmethodology,includingasyntheticinstrumentalcontrolsapproachthatisrobusttothepossibilitythatearlyCECLadoptionanditsimpactarecorrelatedwithanobservedtrend.Themagnitudeofresultsvariessomewhat,withstrongerresultswhenweightingbyportfoliosizeandweakerresultswithsyn-theticcontrols,buttheoverallconclusionremains.Overall,ourresultshighlighttheinfluencethataccountingchangescanhaveonbankbehaviorand,consequently,onthebroadereconomy.

2BackgroundonCECL

TheFinancialAccountingStandardsBoardissuedtheCECLmethodologyonJune16,2016.

2

CECLwentintoeffectaspartofU.S.generallyacceptedaccountingprinciplesforfiscalyearsstartingafterDecember15,2019,forSecuritiesandExchangeCommission(SEC)filers,withadoptionrequiredforprivatecompaniesthreeyearsthereafter.Consequently,CECLwasadoptedonJanuary1,2020bymostpublicU.S.banksandJanuary1,2023bytheremainingU.S.banks.Giventhemanyfactorsassociatedwiththedecisiontogopublicorprivate,firmseffectivelyhadlittleabilitytochoosetheiradoptiondateinadvance.

CECLreplacedtheincurredlossmodel(ILM)method,asILMprovedinsufficientlyresponsiveto2SeeAccountingStandardsUpdate2016-13at

/ASU_2016-13.pdf

.

4

thedeteriorationineconomicconditionsthatoccurredinthe2007–09financialcrisis.Specifically,allowancesremainedlowundertheILMaftertheeconomyhadalreadyenteredarecessionandthemarketvalueofbankequityhaddeclinedsignificantly,suggestingthataforward-lookingstandardmightmorecloselyaligntheaccountingvalueofcapitalwitheconomicreality.

UnderCECL,firmsarerequiredtoforecastloanbalances,charge-offrates,andrecoveryrates.Whileexpectationsformodelsophisticationvarywithfirmsize,firmsareexpectedtoincorporateforward-lookinginformationtoagreaterextentthanundertheILMmethod.Allowancesareintendedtocoveronly“incurred”lossesundertheILMbutaremeanttocoverlossesovertheexpectedremaininglifetimeoftheloanundertheCECLmethodology.

ThedifferingconceptualbasisforallowancesunderCECLmeansthattheytendtobelargerinpractice,particularlywheneconomicconditionsaredeteriorating.Asallowancesgrow,accountingandregulatorymeasuresofcapitaldecline.Thus,anincreaseintheallowancesconstrainsabanksimilarlytoanincreaseintheregulatorycapitalrequirement.

3

Furthermore,CECL’srequirementtorecognizelossesovertheexpectedremaininglifetimemovesforwardthetimingoflossrecognitioninawaywhichdisincentivizeslendingwhenbanksareparticularlyconcernedaboutmeetingcapitalrequirementsintheshortrun.

TohelpillustratethedifferencesbetweentheCECLmethodologyandtheILM,somesimpleex-amplesareprovided.Figure

1

showsanexampleofathree-yearloanthatoriginatedwhentheeconomicoutlookisforsteadygrowthoverthelifeoftheloan.Duringsuchamacroeconomicsetting,supposeabankexpectsa5percentloss.So,ondayone(t=0),theallowancecoverage(loanlossallowance/loanamount)is5percent.Ultimately,inthisexample,theloandoesnotdefault.Themodeledallowanceshrinksovertimeastheprobabilityofaloandefaultingshrinksastheloanmaturesandbadoutcomesseemlesslikelytomaterialize.Theallowanceattheendofyearthreeiszero.Thegraphontherightinfigure

1

showsthesamecoverageratiobutundertheILMmethodology.Becausetheloanneverdefaultedorevenshowedsignsofdeterioration,there

3Bankswithallowancesexceeding1.25percentofcreditrisk-weightedassetsareallowedtodeductthisexcessfromtotalrisk-weightedassets,butthisdeductionoffsetsonlyasmallportionoftheeffectofthereductioninregulatorycapitalassociatedwiththeallowances.

5

wasneveraloanlossallowancechange.

Figure1:AllowanceModelComparison:GoodEconomy,GoodLoan

Assumeathree-yearloan.Economicforecastprojectsslow,steadygrowth.Theloandoesnotshowanysignsofdeterioration

overthethreeyears.

Figure

2

showsthesameloanandeconomicoutlookexceptnowtheloanhasobservabledeteriorationattheendofyeartwoandultimatelydefaultsattheendofyearthree.Thereddashedlineindicatestheactualloss.TheallowanceunderCECLbasedonexpectationsforthefirstyearisthesamebutwouldadjusthigherwhenevidenceofthepossibledefaultappears.FortheILM,theallowancewouldalsoincreaseinyeartwoiftheevidencemadeloandefaultprobable.Inthisexample,thesamelevelisshownforCECLandtheILM.However,theycouldbedifferent,dependingonmodelingassumptionsanddesign.Atdefaultinyearthree,thesameamountofprovisionsandreservesneedtobebookedtocoverthelossunderbothmethodologies.

Figure2:AllowanceModelComparison:GoodEconomy,BadLoan

Assumeathree-yearloan.Economicforecastprojectsslow,steadygrowth.Theloanshowssignsofdeteriorationinyeartwo

andultimatelydefaultsatmaturity.Thereddashedlineindicatesthelossatdefault.

Acrossthesetwoexamples,allowancesbuildearlierunderCECLthanintheILM.Relatedly,theaveragelevelofallowancesunderCECLisgreater.

WeturnnowtotheimplementationofCECLbyU.S.banks.Federalbankingregulatorspassedaruleinearly2019thatwouldspreadtheadoptioneffectoverthreeyears.

4

Thistransitionperiodwasdesignedtogivebanksadditionaltimefortheircapitalplanstoadjust.

However,theCOVID-19pandemicdisruptedtheeconomyshortlyaftermostpublicbanksadopted

4See84FR4222publishedFebruary14,2019(

/content/pkg/FR-2019-02-14/pdf/

2018-28281.pdf

).

6

CECL.Severalemergencyrulemakingsrespondingtothepandemicaffectedtheadoptionandtem-porarilymutedtheeffectofCECLonbanks’regulatorycapital.TheCoronavirusAid,Relief,andEconomicSecurity(CARES)Act,signedintolawonMarch27,2020,providedbankingorganiza-tionstheoptionofdeferringCECLadoptionuntiltheendoftheCOVID-19nationalemergency.Simultaneously,bankingregulatorsissuedaninterimfinalrulethatdelayedtheestimatedeffectofCECLonregulatorycapitalforthreeyears,withatwo-yeartransitionperiodfollowing.

5

VirtuallyallbanksthatchosetotransitionthecapitaleffectofCECLoptedforthemoregenerousversionunderthisemergencyrulemaking.However,relativelyfewoptedtodelayCECLadoptionundertheCARESAct.Delayingwouldnotprovidefirmsmuchifanybenefittotheirregulatorycapitalgiventhemoregeneroustransitionperiodputinplace.Inaddition,asCECLhadalreadycomeintoeffect,defermentwouldhaveimposeditsownoperationalchallengesassociatedwithrevertingbacktooldprocesses.Despitethesechallenges,otherresearchsuggeststhatthosebanksthatdidopttodelayCECLadoptiontendedtobebetterinformedandmoreconcernedaboutCECL’sadoptioneffect.

6

Thus,byexcludingthesefirmsfromoursample,asdiscussedinsection

4

,weareunderstatingtheextenttowhichbanksrespondedtoCECLadoption.

3RelatedLiterature

Theallowanceforloanlossesisacontra-assetaccount.Therefore,itiseffectivelyfundingtheloansthatareexpectedtolosevalueorotherwisehavereducedpayments.Withinthefundingstructure,capitalisalsodesignedtoabsorblossesbecauseitistheresidualclaimant.Thereisnolegalobligationtopaybackholdersofcapital.Theappropriatelevelofcapitalhasbeenasubjectoflong-termdebateandisoutsidethescopeofthispaper.

7

However,comparedwithothersourcesofbankfunding,capitalisgenerallymoreexpensive,atleastfromthebanks’perspective.Bychangingtherequirementtobuildinanearlierloanlossbufferandpossiblyincreasingfundingcosts,CECLcouldchangelendingbehavior.

5See85FR17723publishedMarch31,2020(

/content/pkg/FR-2020-03-31/pdf/

2020-06770.pdf

).

6

Kim,Kim,KleymenovaandLi

(

2026

)reviewSECfilingsandfindthatthebanksreportinganadvanceestimateofCECL’sadoptioneffectweremorelikelytoopttodelayadoption.Similarly,

Bonaldi,LiangandYang

(

2023

)useanalysisofSECfilingstoconcludethatbanksthatweremoreconcernedaboutthenegativeeffectofCECLweremorelikelytodelayadoption.

7See,forexample,

BaselCommitteeonBankingSupervision

(

2010

),

Admatietal.

(

2013

),and

BakerandWurgler

(

2015

).

7

Previousresearchhasdocumentedtheimportanceofbankcapitalrequirementsforcreditsupplyinseveraldifferentsettings.Alloftheseresultsareconsistentwithcapitalbeingamoreexpensivefundingsource.Acrossstudies,thelong-runelasticityoflendingtocapitalrequirements(cumulativepercentagechangeinlendinginresponsetoaonepercentchangeincapitalrequirements)isbetween-0.2and-0.8,withmuchofthelendingadjustmentobservedoverthefewyearsfollowingthechangeincapitalrequirements.Forexample,severalpaperslookattheadoptioneffectsofcapitalrequirementsinEurope.

Fraisse,L´eandThesmar

(

2020

)analyzebankresponsestoadoptingtheBaselIIframeworkinsupervisorydata.Theyfindthata1percentagepoint(orroughly12percent)increaseincapitalrequirementsreduceslendingby2.3to4.5percent.

M´esonnierandMonks

(

2015

)estimatethatbanksforcedtoraisetheircoreTier1capitalratioby1percentagepointfollowingtheEuropeanBankingAuthority’s2011–12capitalexercisehaveannualizedloangrowth1.2percentlowerthanunconstrainedbanks.

Groppetal.

(

2018

)studythesamecapitalexerciseandfindthatbankssubjecttotheexerciseincreasetheircapitalratiosby1.9percentagepointsanddecreaserisk-weightedassetsby16percentagepointsrelativetothecontrolgroup.

Behn,Haselmannand

Wachtel

(

2016

)useaquasi-experimentalresearchdesigntoexplorehowasuddenincreaseinacapitalrequirementaffectslending.Theyfindthatcapitalincreasesof0.5percentagepointareassociatedwitha2.1to3.9percentagepointdeclineinlending.Additionalexamplesofempiricalstudiesofregulatorycapitalandlendinginclude

Aiyaretal.

(

2014

);

Aiyar,CalomirisandWieladek

(

2014

);

Bridgesetal.

(

2014

);and

DeJonghe,DewachterandOngena

(

2020

).Therangeofourpointestimatesfortheimpactofallowancesonloangrowthisconsistentwiththisliterature.Forexample,ourpreferredestimateequatestoanestimatedelasticityoflendingtocapitalrequirementsofabout-0.6.

8

Otherpapersexploretherelationshipbetweencapitalandlendinginadynamicmodel.Forexample,

BerrospideandEdge

(

2010

)useavarietyofmethodstoexplorehowbankcapitalinfluenceslendingandgenerallyfindmodestimpact.Inparticular,anincreaseinthecapitalratioof1percentagepointisassociatedwithalong-runincreaseinannualizedBHCloangrowththatisonlybetween

8Ourestimatedcoefficientof-0.85(table

4

)impliesacumulativechangeinlendingoverthreeyearsofabout-10percent.Aonepercentagepointincreaseinallowancecoverageisequivalenttoa16percentincreaseincapitalrequirementswhenassumingthataverageloanriskweightsare70percent,90percentoftheallowanceimpactistranslatedtocapital,andcapitalrequirementsare8percent;=0.16.Therefore,a16percentincreaseincapitalrequirementsisestimatedasdecreasinglending10percent;=-0.6

8

0.7and1.2percentagepoints.Thisisanequilibriumeffect:bankswithhighercapitalizationrates

tendtolendmoreinthenextperiod.Thisistrueevenaftertryingtocontrolforthingslikebankcharacteristicsandthemacroeconomicenvironment.

9Carlson,ShanandWarusawitharana

(

2013

)trytoidentifytherelationshipatthelocallevelsoastobettercontrolforloandemand.Theyestimatethattheelasticityofbanklendingwithrespecttocapitalratiosishigherincrisisperiodswhencapitalratiosarerelativelylow.Thissuggeststhattheeffectofcapitalratioonbanklendingisnonlinear.ThisisconsistentwithourresultswhenweinteracttheadoptionofCECLwithhowcapital-constrainedanindividualfirmis.FirmswithtightercapitalconstraintshaveevenlessloangrowththanotherCECLadopters.

Thefirststageofourworkcloselyrelatesto

CovasandDionis

(

2021

),aswellas

Loudisetal.

(

2021

).ThesepapersexploretheeffectsofCECLonallowancesandgrowthofdifferenttypesofloans.TheyfindasignificanteffectofCECLontheallowancesandgrowthofconsumerloans,butnoeffectofCECLadoptiononthegrowthratesofotherformsoflending.

CovasandDionis

(

2021

)arguethatthisnon-resultisexpectedastheemergencyrulemakingsoffsetthecapitalimpactforotherformsoflending,while

Loudisetal.

(

2021

)arehesitanttoinfermuchfromtheimpactonconsumerlending.Ourworkexpandsmateriallyontheseearlierfindingsbyalsoconsideringvariabilityinfirm-specificCECLeffect,employingadditionalempiricalstrategies,andincorporatingthepost-pandemicexperienceofCECLlateadopters.

Chenetal.

(

2025

),

GranjaandNagel

(

2025

),and

Yang

(

2025

)alsoestimatetheeffectofCECLadoptiononlending,butaremorenarrowincoveragethanthispaper.

Yang

(

2025

)focusesonresidentialmortgagelending,andfindsareductioninbalancesheetlendinginfavorofsecuritizationforbanksadoptingCECL.

GranjaandNagel

(

2025

)findsaneffectofCECLonthepricingofconsumerloans.

Chenetal.

(

2025

)findasignificanteffectofCECLonoveralllendingandpossibledownstreameffectonemploymentin2020.Byfocusingonthatstressepisode,theyarguethattheeffectsdemonstratethatCECLhasaprocyclicaleffect.SeveralotherstudiesexploretheeffectofCECLonlendingprocyclicality,butmostaremorehypothetical,usingdatabeforeactualCECL

9Otherrelatedpapersinclude

Bernanke,LownandFriedman

(

1991

),

HancockandWilcox

(

1993

),and

Gambacorta

andMistrulli

(

2004

).

9

adoption.

10

Incomparisonto

Chenetal.

(

2025

),ourworkconsidersalongertimeperiodandadditionalempiricalmethodstobetteridentifythemechanism.

ThispaperisconnectedtothebroaderliteratureonCECL.Forexample,otherpapersstudyothereffectsofCECLadoption,includingbankinformationproductionandfinancialreporting.

Hu

(

2024

)looksattheeffectofCECLonsmallbusinesslendingandfindsthatbanksreducetheirlendingmoreonbusinessesthatarefartherfromphysicalbranches.Thisresultisconsistentwiththeoriesaboutinformationacquisition.AdoptingCECLisassociatedwithhigherinformationacquisitionorproductioncosts,makingdistantborrowersmoreexpensive.Relatedly,

Kimetal.

(

2026

)showthatbanksadoptingCECLhavechangesintheirfinancialreportingandoperationsthatareconsistentwithbetterinformationproduction.

ThispaperisalsorelatedtoresearchthatexaminesthelendingeffectsofasimilaraccountingstandardissuedbytheInternationalAccountingStandardsBoard(IASB)onbanklendinginothercountries.In2018,underInternationalFinancialReportingStandards(IFRS)9,firmsusingIASBstandardsneededtouseanexpectedcreditloss(ECL)modelforvaluingfinancialassetsandliabilities.

Ertan

(

2025

)findsthatbanksthatadoptedIFRS9reducedlendingtosmallandmedium-sizedenterprisesbyover10percent.However,theresearchexplainstheseresultsasmoreduetobanks’financialreportingconcernsandimplementationdifficultiesasopposedtosimplyhigherloanlossallowances.

BojarandOlszak

(

2022

)studypubliclytradedbanksinPolandanddonotfindadirecteffectofIFRS9onlending.However,thereisapositiveandsignificantrelationshipbetweenIFRS9andcapital,suggestingthatbankswithhighercapitalratioswerebetterabletoextendmoreloansduringtheimplementationperiod.

4Data

Ourdatasamplebeginsin2016:Q1andendsin2024:Q2.Asdiscussedinsection

2

,entitiesadoptedCECLeitherfollowingJanuary1,2020(“earlyadopters”)orJanuary1,2023(“lateadopters”).

10See,forexample,

CohenandGeraldA.Edwards

(

2017

);

AbadandSuarez

(

2018

);

CovasandNelson

(

2018

);

Harris,KhanandNissim

(

2018

);

LoudisandRanish

(

2019

);and

Chaeetal.

(

2021

).

Jia,KanagaretnamandZhang

(

2025

)looksatthepro-cyclicalityofloanlossprovisions.

10

ThistimeframemeansoursamplehasfouryearsofdatabeforeandafterCECLenactmentfortheearlyadoptersandsixquartersofdatafollowingenactmentbythelateadopters.

Becausethispaperanalyzesbankholdingcompanies(BHCs)aswellasstandalonecommercialbanksthatarenotinaBHC,thedataareacombinationofCallReport(commercialbank)andFRY-9C(BHC)data.Throughoutthispaper,werefertoallfirmsas“banks.”

Toensurethatchangesincorporatestructure,suchasmergers,arenotmisinterpretedaslargeshocks,weaggregatebalancesheetsacrossentitiessothattheyrepresentconsistentlyconsolidatedbankingbusinessesovertime.Mostcommonly,oneormoredepositoryinstitutionshavealwaysbeenconsolidatedintothesameholdingcompanyoveroursampleperiod.Inthiscase,weincludeonlythebalancesheetfortheholdingcompany.

11

However,inthecaseofmergersthatoccurduringoursampleperiod,thismeansconstructinghistorical“pseudo-banks”byretroactivelyconsolidatingthebalancesheetsoftheentitiesthatlatermerged.

Inaddition,wemeasureloanbalancesthroughoutoursampleexclusiveofloansissuedthroughtheSmallBusinessAdministration’sPaycheckProtectionProgram(PPP).

12

PPPloanswereforgivableandwouldultimatelyberepaidbythegovernment.Relatedly,PPPloansdidnotrequireallowancesforcreditlossesandhadnoassociatedrisk-basedcapitalrequirements.WhilethePPPwasasignificantsourceofaggregateloangrowthin2020,particularlyforCECLlateadopters,itwouldnothaveaclearconnectionwithfirms’capitalmanagementprocesses—andthechannelbywhichitwouldhavebeenaffectedisunclear.Byexcludingtheseloans,weremovetheirpotentiallydistortionaryeffectfromtheanalysisandmatchthepracticesofotherresearchers(e.g.,

Chen,

Dou,RyanandZou

(

2025

);

Kim,Kim,KleymenovaandLi

(

2026

)).

Ourdatasampleisdesignedtofocusonasetofbanksthatarerelativelycomparableintermsoftheircomplexityand