Competition and Bank Opacity

Liangliang Jiang, Ross Levine () and Chen Lin
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Liangliang Jiang: Lingnan University

No 52016, Working Papers from Hong Kong Institute for Monetary Research

Abstract: Did regulatory reforms that lowered barriers to competition increase or decrease the quality of information that banks disclose to the public? By integrating the gravity model of investment with the state-specific process of bank deregulation that occurred in the United States from the 1980s through the 1990s, we develop a bank-specific, time-varying measure of deregulation-induced competition. We find that an intensification of competition reduced abnormal accruals of loan loss provisions and the frequency with which banks restate financial statements. The results suggest that competition reduces bank opacity, potentially enhancing the ability of markets to monitor banks.

JEL-codes: G21 G28 G34 G38 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-04
New Economics Papers: this item is included in nep-ban and nep-com
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Citations: View citations in EconPapers (84)

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Related works:
Journal Article: Competition and Bank Opacity (2016)
Working Paper: Competition and Bank Opacity (2014)
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