The Economic Value of Regulated Disclosure: Evidence from the Banking Sector

Posted: 27 Sep 2007

See all articles by Solomon A. Tadesse

Solomon A. Tadesse

University of Michigan at Ann Arbor; University of Chicago - Booth School of Business; University of Pennsylvania - Wharton Financial Institutions Center

Date Written: January 2006

Abstract

The study examines the economic consequences of regulated disclosure in the banking sector, focusing on its impacts on the stability of banking systems. In a cross-country study of banking systems across 49 countries in the 90s, I find that banking crises are less likely in countries with greater regulated disclosure and transparency. Specifically, banking systems are less vulnerable to crisis if supported by financial reporting regimes characterized by (i) more comprehensive disclosure (ii) more timely financial reporting (iii) more informative reporting, and (iv) more credible financial disclosure. To the extent that banking crises are costly, the paper documents the positive impact of accounting information to the real sector of the economy.

Keywords: Regulated disclosure, informativeness, timeliness, credibility, banking crisis

JEL Classification: M41, M42, L51, G18, G21, K23

Suggested Citation

Tadesse, Solomon A. and Tadesse, Solomon A., The Economic Value of Regulated Disclosure: Evidence from the Banking Sector (January 2006). William Davidson Institute Working Paper No. 875, Available at SSRN: https://ssrn.com/abstract=1017360

Solomon A. Tadesse (Contact Author)

University of Michigan at Ann Arbor ( email )

Stephen M. Ross School of Business
Ann Arbor, MI 48109-1234
United States

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

University of Pennsylvania - Wharton Financial Institutions Center ( email )

3641 Locust Walk
Philadelphia, PA 19104-6218
United States

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