Bank opacity and financial crises
Jungherr, Joachim

Data: 2016
Resum: This paper studies a model of endogenous bank opacity. In the model, bank opacity is costly for society because it reduces market discipline and encourages banks to take on too much risk. This is true even in the absence of agency problems between banks and the ultimate bearers of the risk. Banks choose to be inefficiently opaque if the composition of a bank's balance sheet is proprietary information. Strategic behavior reduces transparency and increases the risk of a banking crisis. The model can explain why empirically a higher degree of bank competition leads to increased transparency. Optimal public disclosure requirements may make banks more vulnerable to a run for a given investment policy, but they reduce the risk of a run through an improvement in market discipline. The option of public stress tests is beneficial if the policy maker/nhas access to public information only. This option can be harmful if the policy maker has access to banks' private information.
Ajuts: European Commission 649396
Drets: Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original. Creative Commons
Llengua: Anglès
Col·lecció: Barcelona Graduate School of Economics. ADEMU working paper series
Col·lecció: Ademu Working Papers Series ; 2
Document: Working paper
Matèria: Bank opacity ; Bank runs ; Market discipline ; Bank competition ; Stress tests

Adreça alternativa: https://hdl.handle.net/10230/26003


55 p, 666.3 KB

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 Registre creat el 2018-10-23, darrera modificació el 2022-07-09



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