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- Publisher Website: 10.1016/j.jacceco.2017.11.005
- Scopus: eid_2-s2.0-85044680560
- WOS: WOS:000426229000005
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Article: Reporting choices in the shadow of bank runs
Title | Reporting choices in the shadow of bank runs |
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Authors | |
Keywords | Banking Accounting discretion Bank transparency Bank runs Bank stability |
Issue Date | 2018 |
Citation | Journal of Accounting and Economics, 2018, v. 65, n. 1, p. 85-108 How to Cite? |
Abstract | © 2017 Elsevier B.V. This paper investigates banks’ reporting choices in the context of bank runs. A fundamental-based run imposes market discipline on insolvent banks, but a panic-based run closes banks that could have survived with better coordination among creditors. We augment a bank-run model with the bank's reporting choices. We show that banks with intermediate fundamentals have stronger incentive to misreport than those in the two tails. Moreover, reporting discretion reduces panic-based runs, but excessive discretion also reduces fundamental-based runs. The optimal amount of reporting discretion increases in the bank's vulnerability to panic-based runs. Finally, a given bank's opportunistic use of reporting discretion exerts a negative externality on other banks. Our paper answers the call by Armstrong et al. (2016) and Bushman (2016) to understand better the effects of banks’ special features on their reporting choices. |
Persistent Identifier | http://hdl.handle.net/10722/285807 |
ISSN | 2023 Impact Factor: 5.4 2023 SCImago Journal Rankings: 8.337 |
SSRN | |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Gao, Pingyang | - |
dc.contributor.author | Jiang, Xu | - |
dc.date.accessioned | 2020-08-18T04:56:42Z | - |
dc.date.available | 2020-08-18T04:56:42Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Journal of Accounting and Economics, 2018, v. 65, n. 1, p. 85-108 | - |
dc.identifier.issn | 0165-4101 | - |
dc.identifier.uri | http://hdl.handle.net/10722/285807 | - |
dc.description.abstract | © 2017 Elsevier B.V. This paper investigates banks’ reporting choices in the context of bank runs. A fundamental-based run imposes market discipline on insolvent banks, but a panic-based run closes banks that could have survived with better coordination among creditors. We augment a bank-run model with the bank's reporting choices. We show that banks with intermediate fundamentals have stronger incentive to misreport than those in the two tails. Moreover, reporting discretion reduces panic-based runs, but excessive discretion also reduces fundamental-based runs. The optimal amount of reporting discretion increases in the bank's vulnerability to panic-based runs. Finally, a given bank's opportunistic use of reporting discretion exerts a negative externality on other banks. Our paper answers the call by Armstrong et al. (2016) and Bushman (2016) to understand better the effects of banks’ special features on their reporting choices. | - |
dc.language | eng | - |
dc.relation.ispartof | Journal of Accounting and Economics | - |
dc.subject | Banking | - |
dc.subject | Accounting discretion | - |
dc.subject | Bank transparency | - |
dc.subject | Bank runs | - |
dc.subject | Bank stability | - |
dc.title | Reporting choices in the shadow of bank runs | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jacceco.2017.11.005 | - |
dc.identifier.scopus | eid_2-s2.0-85044680560 | - |
dc.identifier.volume | 65 | - |
dc.identifier.issue | 1 | - |
dc.identifier.spage | 85 | - |
dc.identifier.epage | 108 | - |
dc.identifier.isi | WOS:000426229000005 | - |
dc.identifier.ssrn | 2702504 | - |
dc.identifier.issnl | 0165-4101 | - |