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Does Corruption-Related Disclosure Trigger Market Discipline? Evidence From The Banking Sector Of The Gipsi Countries

Author

Listed:
  • PABLO DE ANDRÉS

    (Finance and Marketing Department, ECGI, Universidad Autónoma de Madrid, Francisco Tomás y Valiente, 5, 28049 Madrid, Spain)

  • SALVATORE POLIZZI

    (Department of Economics, Business and Statistics, University of Palermo, Viale delle Scienze, Building n. 13, 90128 Palermo, Italy)

  • ENZO SCANNELLA

    (Department of Economics, Business and Statistics, University of Palermo, Viale delle Scienze, Building n. 13, 90128 Palermo, Italy)

  • NURIA SUÃ REZ

    (Finance and Marketing Department, Universidad Autónoma de Madrid, Francisco Tomás y Valiente, 5, 28049 Madrid, Spain)

Abstract

This paper investigates the relationship between corruption-related disclosure in banking and the market discipline exercised by depositors. We examine to what extent depositors penalize banks that are opaque with reference to their corruption-related disclosures by demanding higher interest rates for their deposits. By focusing on the banking industry of the GIPSI countries (Greece, Ireland, Portugal, Spain and Italy), we show that banks which disclose less on corruption-related issues tend to be penalized by depositors, who ask for higher interest rates, likely to counterbalance the negative consequences of possible involvement of such banks in corruption scandals. These basic relationships are shaped by specific bank-level characteristics and by the features of each country in terms of institutional quality.

Suggested Citation

  • Pablo De Andrã‰S & Salvatore Polizzi & Enzo Scannella & Nuria Suã Rez, 2025. "Does Corruption-Related Disclosure Trigger Market Discipline? Evidence From The Banking Sector Of The Gipsi Countries," Journal of Financial Management, Markets and Institutions (JFMMI), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 1-41, June.
    • Handle: RePEc:wsi:jfmmix:v:13:y:2025:i:01:n:s2282717x25500045
    DOI: 10.1142/S2282717X25500045
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    Keywords

    Corruption; disclosure; market discipline; banking; GIPSI countries;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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