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Credit and bank opaqueness: How to avoid financial crises?

Author

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  • de Mendonça, Helder Ferreira
  • Galvão, Délio José Cordeiro
  • Loures, Renato Falci Villela

Abstract

This study makes a contribution to the literature on bank opaqueness and bank credit through empirical evidence gathered from data of 310 NYSE and NASDAQ banks for the period 1Q1990 to 4Q2009. In addition to developing an opacity index based on bank risk information, the empirical analysis identifies and considers events of credit sudden stops. The main conclusion is that a decrease in bank opaqueness fosters an environment favorable to the development of a sound banking system, which, in turn, facilitates the strengthening of the credit chain and the avoidance of financial crises.

Suggested Citation

  • de Mendonça, Helder Ferreira & Galvão, Délio José Cordeiro & Loures, Renato Falci Villela, 2013. "Credit and bank opaqueness: How to avoid financial crises?," Economic Modelling, Elsevier, vol. 33(C), pages 605-612.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:605-612
    DOI: 10.1016/j.econmod.2013.05.001
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    References listed on IDEAS

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    Cited by:

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    3. Jacob Kleinow & Andreas Horsch & Mario Garcia-Molina, 2017. "Factors driving systemic risk of banks in Latin America," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(2), pages 211-234, April.
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    More about this item

    Keywords

    Bank opaqueness; Bank credit; Credit sudden stop; Financial crisis;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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