Banks’ Disclosure and Financial Stability

10 Pages Posted: 16 Jan 2014

See all articles by Rhiannon Sowerbutts

Rhiannon Sowerbutts

Bank of England

Peter Zimmerman

University of Oxford - Said Business School

Ilknur Zer

Board of Governors of the Federal Reserve System

Date Written: December 20, 2013

Abstract

Inadequate public disclosure by banks contributed to the financial crisis. This is because investors, unable to judge the risks that banks are bearing, withdraw lending in times of systemic stress. This article presents quantitative indices which allow for the comparison of disclosure between banks and over time. Internationally, disclosure has improved since 2000, particularly around banks’ valuation methods and funding risk. However, more information alone is not sufficient to solve the problem. More needs to be done to ensure that the information provided is useful to investors, and that investors are incentivised to use this information. The ongoing reform agenda aims to address this.

Suggested Citation

Sowerbutts, Rhiannon and Zimmerman, Peter and Zer, Ilknur, Banks’ Disclosure and Financial Stability (December 20, 2013). Bank of England Quarterly Bulletin 2013 Q4. Available at SSRN: https://ssrn.com/abstract=2379363

Rhiannon Sowerbutts (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Peter Zimmerman

University of Oxford - Said Business School ( email )

United Kingdom

Ilknur Zer

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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