Mark Evans of Indiana University will lead our next roundtable discussion, Wednesday March 3rd, 11am ET).  Here is the abstract from his recent paper, written with Leslie Hodder and Pat Hopkins, exploring fair value in commercial banks:

For a sample of commercial banks during 1994–2008, we find that accumulated fair value adjustments for investment securities are positively associated with realized income from investment securities in the following period, suggesting that fair values have predictive ability for future realized income. We also find that our measure of predictive ability appears to be a reasonable proxy for reliability because it varies with traditional proxies for the reliability of reported fair values of investment securities. Furthermore, we provide evidence that the relative ability of fair values to predict reported income is a factor that strengthens the relationship between fair values and the market value of equity for commercial banks. Our results also indicate that market-wide credit risk affects the pricing of fair value information in banks’ market value of equity, suggesting that the value relevance of fair value information is partially dependent on market- or industry-wide factors. Finally, in contrast to prior research, we find that both amortized cost and fair value play important roles in predictive ability and value relevance.

Join us for what should be an interesting conversation.  You can watch on the web here, and get more details on attending in Second Life here.

* Update: you can view  the video of this Round Table event here.