The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking Academic Article uri icon


  • This paper examines the consequences of the paycheck protection program (PPP) for bank risk-taking and whether the shift to the current expected credit loss (CECL) model moderates this effect. We find that the extent of a banks PPP participation is associated with relatively greater changes in risk-taking outside of the PPP. We also show that this effect is concentrated in banks that have not early adopted the CECL model and banks with timelier pre-PPP loan loss provisions, suggesting that timelier loan loss recognition constrains risk-taking incentives. Overall, our findings provide insight into the indirect consequences of government stimulus programs administered through banks and the role of accounting in constraining bank risk-taking. This paper was accepted by Suraj Srinivasan, accounting.

published proceedings


author list (cited authors)

  • Ballew, H. B., Nicoletti, A., & Stuber, S. B.

citation count

  • 1

complete list of authors

  • Ballew, Hailey B||Nicoletti, Allison||Stuber, Sarah B

publication date

  • January 2022