Public Disclosure and Bank Failures

This paper examines how public disclosure of banks' risk exposure affects banks' risk-taking incentives and assesses how the presence of informed depositors influences the soundness of the banking system. It finds that, when banks have complete control over the volatility of their loan por...

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Main Author: Levy Yeyati, Eduardo
Other Authors: Cordella, Tito
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1997, 1997
Series:IMF Working Papers; Working Paper
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:This paper examines how public disclosure of banks' risk exposure affects banks' risk-taking incentives and assesses how the presence of informed depositors influences the soundness of the banking system. It finds that, when banks have complete control over the volatility of their loan portfolios, public disclosure reduces the probability of banking crises. However, when banks do not control their risk exposure, the presence of informed depositors may increase the probability of bank failures
Physical Description:25 p.
ISBN:1451851871
9781451851878