Competition and Opacity in the Financial System

• 成果类型: Article
• 署名作者: Zhang, Gaoqing
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3512
• 发表日期: 2021
• 关键词: coordination; interbank competition; disclosure policies; Rollover risk; Financial institutions; Bank opacity; higher-order beliefs

摘要

This paper studies the effect of competition on opacity in the financial system. In my model, two financial institutions competing for investors simultaneously make a public disclosure decision when both are exposed to rollover risk. I find that in the face of rollover risk, competition between financial institutions has a nonmonotonic effect on their disclosure decisions. More intense competition can reduce disclosure and make the financial system more opaque, especially when investors? private information about the financial institutions is sufficiently precise.