Determinants of Voluntary Bank Disclosure: Evidence from Japanese Shinkin Banks

39 Pages Posted: 31 Mar 2004

See all articles by Mark M. Spiegel

Mark M. Spiegel

Federal Reserve Bank of San Francisco - Economic Research Department

Nobuyoshi Yamori

Kobe University - Research Institute for Economics & Business Administration

Date Written: February 2004

Abstract

Disclosure is widely regarded as a necessary condition for market discipline in a modern financial sector. However, the determinants of disclosure decisions are still unknown, particularly among banks. This paper investigates the determinants of disclosure by Japanese Shinkin banks in 1996 and 1997. This period is unique because disclosure of non-performing loans was voluntary for Shinkin banks at this time. We find that banks with more serious bad loan problems, more leverage, less competitive pressure, and smaller banks were less likely to choose to voluntarily disclose. These results suggest that there may be a role for compulsory disclosure, as weak banks appear to disproportionately avoid voluntary disclosure.

Keywords: disclosure, Japanese banking, market discipline

JEL Classification: G18, G21

Suggested Citation

Spiegel, Mark M. and Yamori, Nobuyoshi, Determinants of Voluntary Bank Disclosure: Evidence from Japanese Shinkin Banks (February 2004). Available at SSRN: https://ssrn.com/abstract=518084

Mark M. Spiegel (Contact Author)

Federal Reserve Bank of San Francisco - Economic Research Department ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-3184 (Phone)
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HOME PAGE: http://www.frbsf.org/economics/economists/mspiegel.html

Nobuyoshi Yamori

Kobe University - Research Institute for Economics & Business Administration ( email )

2-1, Rokkodai cho
Nada-ku
Kobe, 657-8501
Japan

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