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Competition and Bank Opacity

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  • Liangliang Jiang
  • Ross Levine
  • Chen Lin

Abstract

Did regulatory reforms that lowered barriers to competition among U.S. banks increase or decrease the quality of information that banks disclose to the public and regulators? We find that an intensification of competition reduced abnormal accruals of loan loss provisions and the frequency with which banks restate financial statements. The results indicate that competition reduces bank opacity, enhancing the ability of markets and regulators to monitor banks.

Suggested Citation

  • Liangliang Jiang & Ross Levine & Chen Lin, 2014. "Competition and Bank Opacity," NBER Working Papers 20760, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:20760
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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