IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/27266.html
   My bibliography  Save this paper

Post-crisis bank liquidity risk management disclosure

Author

Listed:
  • Simplice A., Asongu

Abstract

Purpose – 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.

Suggested Citation

  • Simplice A., Asongu, 2010. "Post-crisis bank liquidity risk management disclosure," MPRA Paper 27266, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27266
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/27266/1/MPRA_paper_27266.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/30129/1/MPRA_paper_30129.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/37450/2/MPRA_paper_37450.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Goodhart, C., 2008. "Liquidity risk management," Financial Stability Review, Banque de France, issue 11, pages 39-44, February.
    2. Admati, Anat R & Pfleiderer, Paul, 2000. "Forcing Firms to Talk: Financial Disclosure Regulation and Externalities," Review of Financial Studies, Society for Financial Studies, vol. 13(3), pages 479-519.
    3. Merrouche, Ouarda & Schanz, Jochen, 2010. "Banks' intraday liquidity management during operational outages: Theory and evidence from the UK payment system," Journal of Banking & Finance, Elsevier, vol. 34(2), pages 314-323, February.
    4. Detragiache, Enrica & Gupta, Poonam, 2006. "Foreign banks in emerging market crises: Evidence from Malaysia," Journal of Financial Stability, Elsevier, vol. 2(3), pages 217-242, October.
    5. Tito Cordella & Eduardo Levy Yeyati, 1998. "Public Disclosure and Bank Failures," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 110-131, March.
    6. Dinger, Valeriya, 2009. "Do foreign-owned banks affect banking system liquidity risk?," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 647-657, December.
    7. Mitusch, Kay & Nautz, Dieter, 2001. "Interest rate and liquidity risk management and the European money supply process," Journal of Banking & Finance, Elsevier, vol. 25(11), pages 2089-2101, November.
    8. Demirgüç-Kunt, AslI & Detragiache, Enrica & Tressel, Thierry, 2008. "Banking on the principles: Compliance with Basel Core Principles and bank soundness," Journal of Financial Intermediation, Elsevier, vol. 17(4), pages 511-542, October.
    9. Chen, Yehning & Hasan, Iftekhar, 2006. "The transparency of the banking system and the efficiency of information-based bank runs," Journal of Financial Intermediation, Elsevier, vol. 15(3), pages 307-331, July.
    10. Boot, Arnoud W A & Thakor, Anjan V, 2001. "The Many Faces of Information Disclosure," Review of Financial Studies, Society for Financial Studies, vol. 14(4), pages 1021-1057.
    11. Qian, Yiming & John, Kose & John, Teresa A., 2004. "Financial system design and liquidity provision by banks and markets in a dynamic economy," Journal of International Money and Finance, Elsevier, vol. 23(3), pages 385-403, April.
    12. Ratnovski, Lev, 2009. "Bank liquidity regulation and the lender of last resort," Journal of Financial Intermediation, Elsevier, vol. 18(4), pages 541-558, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibrahim, Awad Elsayed Awad & Hussainey, Khaled & Nawaz, Tasawar & Ntim, Collins & Elamer, Ahmed, 2022. "A systematic literature review on risk disclosure research: State-of-the-art and future research agenda," International Review of Financial Analysis, Elsevier, vol. 82(C).
    2. Bakhita Hamdow Gad Elkreem Braima, 2017. "Impact of Islamic Securitization (Sukuk) on Islamic Banks Liquidity Risk in Light of Basel III Requirements," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 6(1), pages 85-100, January.
    3. Yiannis Anagnostopoulos & Jackie Kabeega, 2019. "Insider perspectives on European banking challenges in the post-crisis regulation environment," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(2), pages 136-158, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ratnovski, Lev, 2013. "Liquidity and transparency in bank risk management," Journal of Financial Intermediation, Elsevier, vol. 22(3), pages 422-439.
    2. Chen, Yehning & Hasan, Iftekhar, 2006. "The transparency of the banking system and the efficiency of information-based bank runs," Journal of Financial Intermediation, Elsevier, vol. 15(3), pages 307-331, July.
    3. Chen, Yehning & Hasan, Iftekhar, 2005. "The transparency of the banking industry and the efficiency of information-based bank runs," Research Discussion Papers 24/2005, Bank of Finland.
    4. Cristina Alexandrina Ștefănescu, 2014. "Transparency in European banking system – a technical and economic approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(51), pages 91-105, March.
    5. repec:zbw:bofrdp:2005_024 is not listed on IDEAS
    6. François Guillemin & Maria Semenova, 2020. "Transparency and market discipline: evidence from the Russian interbank market," Annals of Finance, Springer, vol. 16(2), pages 219-251, June.
    7. Ari Hyytinen & Tuomas Takalo, 2002. "Enhancing Bank Transparency: A Re-assessment," Review of Finance, European Finance Association, vol. 6(3), pages 429-445.
    8. Bourgain, Arnaud & Pieretti, Patrice & Zanaj, Skerdilajda, 2012. "Financial openness, disclosure and bank risk-taking in MENA countries," Emerging Markets Review, Elsevier, vol. 13(3), pages 283-300.
    9. Chen, Yehning & Hasan, Iftekhar, 2005. "The transparency of the banking industry and the efficiency of information-based bank runs," Bank of Finland Research Discussion Papers 24/2005, Bank of Finland.
    10. Jungherr, Joachim, 2018. "Bank opacity and financial crises," Journal of Banking & Finance, Elsevier, vol. 97(C), pages 157-176.
    11. Usman Bashir & Shoaib Khan & Abdulhafiz Jones & Muntazir Hussain, 2021. "Do banking system transparency and market structure affect financial stability of Chinese banks?," Economic Change and Restructuring, Springer, vol. 54(1), pages 1-41, February.
    12. König-Kersting, Christian & Trautmann, Stefan T. & Vlahu, Razvan, 2022. "Bank instability: Interbank linkages and the role of disclosure," Journal of Banking & Finance, Elsevier, vol. 134(C).
    13. Karima Bouaiss & Hervé Alexandre & Catherine Refait-Alexandre, 2017. "Will Bank Transparency really Help Financial Markets and Regulators?," Working Papers hal-01637917, HAL.
    14. Dr. Nicole Allenspach, 2009. "Banking and Transparency: Is More Information Always Better?," Working Papers 2009-11, Swiss National Bank.
    15. Fosu, Samuel & Ntim, Collins G. & Coffie, William & Murinde, Victor, 2017. "Bank opacity and risk-taking: Evidence from analysts’ forecasts," Journal of Financial Stability, Elsevier, vol. 33(C), pages 81-95.
    16. repec:zbw:bofrdp:2012_009 is not listed on IDEAS
    17. Ryuichiro Izumi, 2021. "Opacity: Insurance and Fragility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 146-169, April.
    18. Etienne Farvaque & Catherine Refait-Alexandre & Dhafer Saïdane, 2011. "Corporate disclosure: A review of its (direct and indirect) benefits and costs," International Economics, CEPII research center, issue 128, pages 5-31.
    19. Petr Janský, 2020. "European banks and tax havens: evidence from country-by-country reporting," Applied Economics, Taylor & Francis Journals, vol. 52(54), pages 5967-5985, November.
    20. Xue, Hao & Zheng, Ronghuo, 2021. "Word-of-mouth communication, noise-driven volatility, and public disclosure," Journal of Accounting and Economics, Elsevier, vol. 71(1).
    21. Fecht, Falko & Wagner, Wolf, 2009. "The marketability of bank assets, managerial rents and banking stability," Journal of Financial Stability, Elsevier, vol. 5(3), pages 272-282, September.
    22. Delis, Manthos D & Staikouras, Panagiotis, 2009. "On-site audits, sanctions, and bank risk-taking: An empirical overture towards a novel regulatory and supervisory philosophy," MPRA Paper 16836, University Library of Munich, Germany.

    More about this item

    Keywords

    Post crisis; Liquidity risk management; Bank;
    All these keywords.

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:27266. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.