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Determinants of Voluntary Bank Disclosure: Evidence from Japanese Shinkin Banks

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  • Mark M. Spiegel
  • Nobuyoshi Yamori

Abstract

Disclosure is widely regarded as a necessary condition for market discipline in a modern financial sector. However, the determinants of disclosure decisions are still unknown, particularly among banks. This paper investigates the determinants of disclosure by Japanese Shinkin banks in 1996 and 1997. This period is unique because disclosure of non-performing loans was voluntary for Shinkin banks at this time. We find that banks with more serious bad loan problems, more leverage, less competitive pressure, and smaller banks were less likely to choose to voluntarily disclose. These results suggest that there may be a role for compulsory disclosure, as weak banks appear to disproportionately avoid voluntary disclosure.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2004/wp-cesifo-2004-02/cesifo1_wp1135.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1135.

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Date of creation: 2004
Date of revision:
Handle: RePEc:ces:ceswps:_1135

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Keywords: disclosure; Japanese banking; market discipline;

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References

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  1. Mark M. Spiegel, 1999. "Moral hazard under the Japanese "convoy" banking system," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
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  18. Donald Morgan & Kevin Stiroh, 2001. "Market Discipline of Banks: The Asset Test," Journal of Financial Services Research, Springer, vol. 20(2), pages 195-208, October.
  19. Mark M. Spiegel & Nobuyoshi Yamori, 2004. "The Evolution Of Bank Resolution Policies In Japan: Evidence From Market Equity Values," Journal of Financial Research, Southern Finance Association & Southwestern Finance Association, vol. 27(1), pages 115-132.
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Citations

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Cited by:
  1. Mathias HOFFMANN & OKUBO Toshihiro, 2012. "By a Silken Thread: Regional banking integration and pathways to financial development in Japan's Great Recession," Discussion papers 12026, Research Institute of Economy, Trade and Industry (RIETI).
  2. Frederick T. Furlong & Robard Williams, 2006. "Financial market signals and banking supervision: are current practices consistent with research findings?," Economic Review, Federal Reserve Bank of San Francisco, pages 17-29.
  3. WATANABE Wako, 2007. "How Do Relationship Lenders Price Loans to Small Firms?: "Hold-Up" Costs, Transparency, and Private and Public Security," Discussion papers 07058, Research Institute of Economy, Trade and Industry (RIETI).
  4. Spiegel, Mark M. & Yamori, Nobuyoshi, 2007. "Market price accounting and depositor discipline: The case of Japanese regional banks," Journal of Banking & Finance, Elsevier, vol. 31(3), pages 769-786, March.
  5. Elizabeth de Almeida Neves Di Beneditto & Raimundo Nonato Sousa da Silva, 2008. "Analysis of the Disclosure Level by Brazilian Financial Institutions Following the Basel Capital Accord (Basel II) – A multiple case study," Brazilian Business Review, Fucape Business School, vol. 5(3), pages 181-197, September.
  6. Kazumine Kondo, 2010. "What Promotes Japanese Regional Banks to Disclose Credit Ratings Voluntarily?," Economics Bulletin, AccessEcon, vol. 30(2), pages 1091-1104.
  7. Nobuyoshi Yamori & Kei Tomimura & Kozo Harimaya, 2011. "What kinds of credit associations favour introducing new financial technology?," Applied Economics Letters, Taylor & Francis Journals, vol. 18(4), pages 343-347.
  8. Mark Spiegel & Nobuyoshi Yamori, 2004. "Market price accounting and depositor discipline in Japanese regional banks," Working Paper Series 2004-27, Federal Reserve Bank of San Francisco.
  9. Kondo, Kazumine, 2010. "What Promotes Japanese Regional Banks to Disclose Credit Ratings Voluntarily?," MPRA Paper 20468, University Library of Munich, Germany.

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