Disclosure, ownership structure and bank risk: Evidence from Asia

Bowo Setiyono () and Amine Tarazi
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Bowo Setiyono: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

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Abstract: We investigate the impact of the interaction of disclosure and ownership structure on bank risk. Using a sample of 209 commercial banks from Asia during the 2004-2010 period, we find that disclosure is negatively associated with income volatility and that such an impact is stronger in the presence of block holders and institutional ownership and weaker with insider or government ownership. Our results also provide evidence that better disclosure ensures greater stability as measured by individual bank default risk. Furthermore, a deeper investigation shows that disclosure on income statement, loans, other earning assets, deposits, and memo lines plays a stronger role in limiting risk than disclosure on non-deposit liabilities.

Keywords: Bank risk; disclosure index; bank ownership (search for similar items in EconPapers)
Date: 2014-02-13
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-rmg and nep-sea
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