Title

Competition and bank opacity

Document Type

Journal article

Source Publication

The Review of Financial Studies

Publication Date

7-1-2016

Volume

29

Issue

7

First Page

1911

Last Page

1942

Publisher

Oxford University Press

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.

DOI

10.1093/rfs/hhw016

Print ISSN

08939454

E-ISSN

14657368

Publisher Statement

Copyright © The Author 2016. Published by Oxford University Press on behalf of The Society for Financial Studies. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Jiang, L., Levine, R., & Lin, C. (2016). Competition and Bank Opacity. The Review of Financial Studies, 29(7), 1911-1942. doi: 10.1093/rfs/hhw016