Competition and Opacity in the Financial System

Gaoqing Zhang ()
Additional contact information
Gaoqing Zhang: Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455

Management Science, 2021, vol. 67, issue 3, 1895-1913

Abstract: This paper studies the effect of competition on opacity in the financial system. In my model, two financial institutions competing for investors simultaneously make a public disclosure decision when both are exposed to rollover risk. I find that in the face of rollover risk, competition between financial institutions has a nonmonotonic effect on their disclosure decisions. More intense competition can reduce disclosure and make the financial system more opaque, especially when investors’ private information about the financial institutions is sufficiently precise. This paper was accepted by Suraj Srinivasan, accounting.

Keywords: coordination; interbank competition; disclosure policies; rollover risk; financial institutions; bank opacity; higher-order beliefs (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.1287/mnsc.2019.3512 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:67:y:2021:i:3:p:1895-1913

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().