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The Economic Value of Regulated Disclosure: Evidence from the Banking Sector

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  • Solomon Tadesse

Abstract

The study examines the economic consequences of regulated disclosure in the banking sector, focusing on its impacts on the stability of banking systems. In a cross-country study of banking systems across 49 countries in the 90s, I find that banking crises are less likely in countries with greater regulated disclosure and transparency. Specifically, banking systems are less vulnerable to crisis if supported by financial reporting regimes characterized by (i) more comprehensive disclosure (ii) more timely financial reporting (iii) more informative reporting, and (iv) more credible financial disclosure. To the extent that banking crises are costly, the paper documents the positive impact of accounting information to the real sector of the economy.

Suggested Citation

  • Solomon Tadesse, 2006. "The Economic Value of Regulated Disclosure: Evidence from the Banking Sector," William Davidson Institute Working Papers Series wp875, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2007-875
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/57255/1/wp875.pdf
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    Keywords

    Regulated disclosure; informativeness; timeliness; credibility; banking crisis;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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