A Tale of Two Market Disciplines: How Does Bank Financial Misconduct Affect Peer Banks in the Local Deposit Market

• 成果类型: Article; Early Access
• 署名作者: Kang, Ya; Lin, Yupeng; Qiu, Yang
• 署名单位: Chinese University of Hong Kong; National University of Singapore; Zhejiang University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456; 1475-679X
• DOI: 10.1111/1475-679x.70069
• 发表日期: 2026-05-03
• 关键词: deposit market discipline; bank financial misconduct; reallocation; Bank run; accounting restatements; CONSEQUENCES; contagion; runs; TRANSPARENCY; governance; management; insurance; selection; literacy

摘要

This study examines the spillover effect of bank financial misconduct on the uninsured deposits of peer banks within local markets. We first validate that misconduct banks experience an increase in deposit spreads and a corresponding outflow of deposits following the misconduct. We then show local peer banks exhibit divergent deposit responses, contingent on how misconduct is perceived by information recipients in different economic contexts. During normal periods, depositors receiving a negative signal about bank misconduct reallocate their funds from misconduct banks to local peers, a local reallocation effect that decreases deposit spreads and increases deposit inflows for peer banks. Cross-sectional analysis further reveals that this local reallocation effect is more pronounced for financially sophisticated depositors, amplified when peer banks have strong fundamentals, but attenuated when misconduct banks are financially sound. During financial crisis periods, however, bank misconduct leads to withdrawals from both misconduct banks and their peer banks, a local contagion effect whereby local peer banks face increased deposit spreads and deposit outflows following the misconduct.