{'fraction_non_alphanumeric': 0.019753086419753086, 'fraction_numerical': 0.016049382716049384, 'mean_word_length': 5.647540983606557, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Tailoring in the Application of Regulatory Accounting Guidelines: Evidence from Community Banks

We examine the latitude that regulators provide to banks in how they manage loan loss allowances. Empirical tests on subsamples of 64,807 annual observations of banks, 2006 to 2015, show that correlations of provisions for loan losses and subsequent charge-offs, which are expected under regulatory guidelines, are weaker for smaller banks and that, further, the weaker correlations of smaller banks do not necessarily constrain them from achieving a given regulatory-assessed managerial performance rating. We consider this to be evidence of a “tailoring” in accounting oversight that is relevant to the enforcement of former, current and future standards established by the Financial Accounting Standards Board.