Title
Creditor rights, information sharing, and bank risk taking
Document Type
Journal article
Source Publication
Journal of Financial Economics
Publication Date
6-1-2010
Volume
96
Issue
3
First Page
485
Last Page
512
Publisher
Elsevier BV
Keywords
Creditor rights; Information sharing; Bank risk taking; Financial crisis; Economic growth
Abstract
Looking at a sample of nearly 2,400 banks in 69 countries, we find that stronger creditor rights tend to promote greater bank risk taking. Consistent with this finding, we also show that stronger creditor rights increase the likelihood of financial crisis. On the plus side, we find that stronger creditor rights are associated with higher growth. In contrast, we find that the benefits of information sharing among creditors appear to be universally positive. Greater information sharing leads to higher bank profitability, lower bank risk, a reduced likelihood of financial crisis, and higher economic growth.
DOI
10.1016/j.jfineco.2010.02.008
Print ISSN
0304405X
Publisher Statement
Copyright © 2010 Elsevier B.V. All rights reserved.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Houston, J. F., Lin, C., Lin, P., & Ma, Y. (2010). Creditor rights, information sharing, and bank risk taking. Journal of Financial Economics, 96(3), 485-512. doi: 10.1016/j.jfineco.2010.02.008
