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- Title
Disclosure of Bank-Specific Information and the Stability of Financial Systems.
- Authors
Dai, Liang; Luo, Dan; Yang, Ming
- Abstract
We find that disclosing bank-specific information reallocates systemic risk, but whether it mitigates systemic bank runs depends on the nature of information disclosed. Disclosure reveals banks' resilience to adverse shocks and shifts systemic risk from weak to strong banks. Yet, only disclosure of banks' exposure to systemic risk can mitigate systemic bank runs because it shifts systemic risk from more vulnerable banks to those less vulnerable. Disclosure of banks' idiosyncratic shortfalls of funds does not differentiate such exposure, rendering the resultant reallocation of systemic risk ineffective in mitigating systemic runs.
- Subjects
BANKING industry; BANK runs; DISCLOSURE; RISK exposure; SYSTEMIC risk (Finance)
- Publication
Review of Financial Studies, 2024, Vol 37, Issue 4, p1315
- ISSN
0893-9454
- Publication type
Article
- DOI
10.1093/rfs/hhad089