Risk Reporting and Bank Runs
AbstractIncreasing risk disclosure of banks, e.g., via risk reporting in their annual accounts, is high on the agenda. In this paper, I analyze whether risk reporting of banks shows only favorable effects, as regulatory authorities suppose, or whether there are also undesired effects. Following other studies on deposit contracts and bank runs, I concentrate on the impact on depositors’ withdrawal decisions and banks’ insolvency risk. My analysis shows mixed results: risk reporting does not generally lead to a decrease in banks’ risk exposure and the probability of bank runs, respectively. Instead, it induces higher insolvency risk under certain conditions, which I identify, and may even lower welfare.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 61 (2009)
Issue (Month): 1 (January)
Bank Run; Insolvency Risk; Risk Reporting;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (sbr).
If references are entirely missing, you can add them using this form.