Disclosure, Ownership Structure and Bank Risk: Evidence from Asia

50 Pages Posted: 14 Feb 2014 Last revised: 19 Dec 2014

See all articles by Bowo Setiyono

Bowo Setiyono

Université de Limoges, LAPE; Universitas Gadjah Mada (UGM) - Faculty of Economics and Business (FEB)

Amine Tarazi

University of Limoges - Faculty of Law and Economic Science

Date Written: October 23, 2014

Abstract

We investigate the impact of the interaction of disclosure and ownership structure on bank risk. Using a sample of 209 commercial banks from Asia during the 2004-2010 period, we find that disclosure is negatively associated with income volatility and that such an impact is stronger in the presence of block holders and institutional ownership and weaker with insider or government ownership. Our results also provide evidence that better disclosure ensures greater stability as measured by individual bank default risk. Furthermore, a deeper investigation shows that disclosure on income statement, loans, other earning assets, deposits, and memo lines plays a stronger role in limiting risk than disclosure on non-deposit liabilities.

Keywords: bank risk, disclosure index, bank ownership

JEL Classification: G21, G28, G32

Suggested Citation

Setiyono, Bowo and Tarazi, Amine, Disclosure, Ownership Structure and Bank Risk: Evidence from Asia (October 23, 2014). 27th Australasian Finance and Banking Conference 2014 Paper. Available at SSRN: https://ssrn.com/abstract=2395315 or http://dx.doi.org/10.2139/ssrn.2395315

Bowo Setiyono (Contact Author)

Université de Limoges, LAPE ( email )

5 rue Félix Eboué BP3127
LIMOGES, 87031
France

Universitas Gadjah Mada (UGM) - Faculty of Economics and Business (FEB)

Jl. Humaniora, Bulaksumur
Sleman
Jogjakarta, DI Yogyakarta 55281
Indonesia

Amine Tarazi

University of Limoges - Faculty of Law and Economic Science ( email )

5 rue Felix Eboue
Limoges, 87000
France

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