Reporting choices in the shadow of bank runs

• 成果类型: Article
• 署名作者: Gao, Pingyang; Jiang, Xu
• 署名单位: University of Chicago; Duke University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.11.005
• 发表日期: 2018
• 关键词: CORPORATE GOVERNANCE; INFORMATION; COORDINATION; manipulation; probability; CONTRACTS; MODEL; debt; RISK

摘要

This paper investigates banks' reporting choices in the context of bank runs. A fundamental-based run imposes market discipline on insolvent banks, but a panic-based run closes banks that could have survived with better coordination among creditors. We augment a bank-run model with the bank's reporting choices. We show that banks with intermediate fundamentals have stronger incentive to misreport than those in the two tails. Moreover, reporting discretion reduces panic-based runs, but excessive discretion also reduces fundamental-based runs. The optimal amount of reporting discretion increases in the bank's vulnerability to panic-based runs. Finally, a given bank's opportunistic use of reporting discretion exerts a negative externality on other banks. Our paper answers the call by Armstrong et al. (2016) and Bushman (2016) to understand better the effects of banks' special features on their reporting choices. (C) 2017 Elsevier B.V. All rights reserved.