Financial Transparency and Sources of Hidden Capital in Turkish Banks

31 Pages Posted: 18 Apr 2009 Last revised: 25 Feb 2011

Date Written: April 17, 2009

Abstract

This paper investigates how changes in regulatory and economic environments affect the transparency of banks' financial-statements. Reregulation and a volatile economy make Turkish banks the ideal sample. I disaggregate sources of both hidden and booked capital in Turkish banks traded on the Istanbul Stock Exchange between 1988 and 2006. Hidden capital account for the difference between the accounting and opportunity-cost measures of a firm's net worth. Hidden capital increases in crisis periods which indicate a greater reliance on government-contributed safety-net capital. The increase in hidden capital is more pronounced for large banks. Too-Big-To-Fail policies may explain why large banks are the beneficiaries of government-contributed capital.

Keywords: Transparency, financial safety net, Turkish financial crisis

JEL Classification: G21, G28, G15

Suggested Citation

Tanyeri, Başak, Financial Transparency and Sources of Hidden Capital in Turkish Banks (April 17, 2009). Journal of Financial Services Research, Vol. 37, No. 1, February 2010, Available at SSRN: https://ssrn.com/abstract=1389516

Başak Tanyeri (Contact Author)

Bilkent University ( email )

06533 Bilkent, Ankara
Turkey
903122901871 (Phone)

HOME PAGE: http://www.bilkent.edu.tr/~basak

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