Post-crisis bank liquidity risk management disclosure
AbstractPurpose – This work seeks to investigate what post crisis principles, banks have taken in a bid to manage liquidity risk. Its basis is founded on the ground that, the financial liquidity market was greatly affected during the recent economic turmoil and financial meltdown; when liquidity management disclosure was imperative for confidence building in depositors and shareholders. Design/methodology/approach – The study investigates Basel II pillar 3 disclosures on liquidity risk management in 20 of the top 33 world banks. Bank selection is based on available information, geographical balance and language permissibility. Information is searched from the World Wide Web; with a minimum of one hour allocated for ‘content search’; notwithstanding time spell for ‘content analysis’. When information on liquidity risk management is found, content scrutiny is guided by 16 disclosure principles; clubbed in four categories. Findings – Just 25% of sampled banks provide explicitly public accessible liquidity risk management information. This is a stark indication that, even in the post-crisis era, many top ranking banks do not still take seriously Basel disclosure norms; especially the February 2008 pre-crisis warning of the Basel Committee on Banking Supervision. Implications/limitations – Stakeholders of banks should easily have access to information on liquidity risk management. Banks falling short of this might not breed confidence in customers and shareholders in event of financial panic and turmoil. Like in the run-up to the previous financial crisis, if banks are not compelled to explicitly and expressly disclose what measures they adopt in a bid to guarantee stakeholder liquidity ; the onset of any financial shake-up would only precipitate a meltdown. The main limitation of this study is; the World Wide Web is used as the only source of information for bank stakeholders. Originality/value – The contribution of this paper to literature can be viewed from the role it plays in investigating what post-crisis measures banks have taken to inform stakeholders on how they manage liquidity risk. Paper type: Qualitative finance research paper.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27266.
Date of creation: 07 Dec 2010
Date of revision:
Post crisis; Liquidity risk management; Bank;
Other versions of this item:
- Simplice A. Asongu, 2013. "Post-crisis bank liquidity risk management disclosure," Qualitative Research in Financial Markets, Emerald Group Publishing, vol. 5(1), pages 65-84, March.
- Asongu Simplice, 2010. "Post-Crisis Bank Liquidity Risk Management Disclosure," Working Papers 10/002, African Governance and Development Institute., revised 08 Aug 2011.
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- G00 - Financial Economics - - General - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-BAN-2010-12-18 (Banking)
- NEP-RMG-2010-12-18 (Risk Management)
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