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dc.contributor.authorJUNGHERR, Joachim
dc.date.accessioned2016-04-05T12:13:37Z
dc.date.available2016-04-05T12:13:37Z
dc.date.issued2016
dc.identifier.urihttps://hdl.handle.net/1814/40586
dc.descriptionCreative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properly attributed.en
dc.description.abstractThis paper studies a model of endogenous bank opacity. In the model, bank opacity is costly for society because it reduces market discipline and encourages banks to take on too much risk. This is true even in the absence of agency problems between banks and the ultimate bearers of the risk. Banks choose to be inefficiently opaque if the composition of a bank’s balance sheet is proprietary information. Strategic behavior reduces transparency and increases the risk of a banking crisis. The model can explain why empirically a higher degree of bank competition leads to increased transparency. Optimal public disclosure requirements may make banks more vulnerable to a run for a given investment policy, but they reduce the risk of a run through an improvement in market discipline. The option of public stress tests is beneficial if the policy maker has access to public information only. This option can be harmful if the policy maker has access to banks’ private information.en
dc.description.sponsorshipThe ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.en
dc.format.mimetypeapplication/pdfen
dc.language.isoenen
dc.relationinfo:eu-repo/grantAgreement/EC/H2020/649396/EUen
dc.relation.ispartofseriesADEMU Working Paperen
dc.relation.ispartofseries2016/002en
dc.relation.urihttp://hdl.handle.net/10230/26003en
dc.rightsinfo:eu-repo/semantics/openAccessen
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.titleBank opacity and financial crisesen
dc.typeWorking Paperen


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