In some sectors, banks have deliberately slowed down to now assess and develop their own capacities to lend more prudently. The process of mergers and acquisition in a number of banks also impact private sector credit as most “acquired banks” slowed down their business.
It is not appropriate to believe that the ‘invisible hand’ of the market would generate the requisite information, irrespective of the accounting standards in place. This argument of the presumed omniscience of markets tends to disregard the fact that producing information can be costly.