英语翻译To empirically provide insight on the controversy over f

英语翻译
To empirically provide insight on the controversy over fair value accounting for financial
instruments,we assess whether a fair value leverage ratio can explain measures of a bank’s credit
risk better than a leverage ratio based on a mixture of fair values and historical costs consistent
with the mixed-attribute model of US Generally Accepted Accounting Principles (GAAP) and a
leverage ratio based on fewer fair values than GAAP which is consistent with regulatory Tier 1
capital.2 We focus on balance sheet leverage because it is a very commonly used ratio for
assessing firm risk.We define a bank’s credit risk as the risk that the bank defaults on its
obligations,and we focus on credit risk because understanding a bank’s credit risk is essential to
understanding its financial condition.Furthermore,a bank’s credit risk is directly related to the
credit risk inherent in the bank’s portfolio of financial instruments,and it is widely believed that
an underestimation of credit risk in financial instruments held by banks contributed significantly
to the recent financial crisis (GAO 2009).This highlights the importance of understanding the
relationship between fair value accounting for financial instruments and banks’ credit risk.