Title: The relevance of valuation principles in a financial crisis: senior bank managers' evaluations of other banks on the interbank market

Authors: Roy Liff; Gunnar Wahlström

Addresses: School of Business, Economics and Law, Gothenburg Research Institute, University of Gothenburg, Box 603, SE 405 30 Gothenburg, Sweden ' School of Business, Economics and Law, Gothenburg Research Institute, University of Gothenburg, Box 603, SE 405 30 Gothenburg, Sweden

Abstract: This article examines senior bank managers' evaluations of other banks in the interbank market during times of financial crisis. We conclude that the fair value principle demands greater awareness of the need for reputational monitoring, evaluation by thick trust and scepticism towards numbers. Monitoring during crisis includes neither historical cost nor fair value numbers, because numbers are distrusted. Consequently, valuation principles may not explain contagion effects during crisis.

Keywords: bank; financial crisis; contagion effects; interbank market; senior bank managers; trust; financial accounting; fair value; historical cost; evaluation; valuation principles.

DOI: 10.1504/IJCA.2018.096766

International Journal of Critical Accounting, 2018 Vol.10 No.5, pp.363 - 379

Received: 27 Dec 2017
Accepted: 25 Jun 2018
Published online: 10 Dec 2018 *

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