 Ethical bank disclosures and liquidity creationGeorge Kladakis, Lei Chen and Sotirios K. Bellos Journal of International Financial Markets, Institutions and Money, 2023, vol. 84, issue C Abstract: Ethics in finance and in banks have attracted increasing attention after the global financial crisis of 2007–2009. Although engagement in more ethical activities for banks has been a legitimate social expectation, the impact of it on the financial performance appears to be unclear. We examine whether ethics-related disclosures can help banks create more liquidity by conducting textual analysis of hand-collected bank annual reports and unearth interesting findings. First, we find that the probability of including a code of ethics in the annual report increases with bank risk (i.e. loan loss reserves and risk-weighted assets). Second, our results indicate that liquidity creation is positively associated with the relative frequency of ethics-related terms in the annual reports of banks that publish a code of ethics. Our findings suggest that ethical bank disclosures can mitigate risk concerns and attract more business that allows banks to create more liquidity. Keywords: Bank ethics; Liquidity creation; Annual report; Textual analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:84:y:2023:i:c:s1042443123000227 DOI: 10.1016/j.intfin.2023.101754 Access Statistics for this article Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely More articles in Journal of International Financial Markets, Institutions and Money from Elsevier |
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