Disclosure Regulation in the Commercial Banking Industry: Lessons from the National Banking Era
55 Pages Posted: 4 Oct 2014 Last revised: 30 Sep 2016
Date Written: September 21, 2016
I exploit variation in the adoption of disclosure and supervisory regulation across U.S. states to examine their impact on the development and stability of commercial banks. The empirical results suggest that the adoption of state-level requirements to report financial statements in local newspapers are associated with greater stability and development of commercial banks. I also examine which political constituencies influence the adoption of disclosure and supervisory regulation. I find that powerful landowners and small private banks are associated with late adoption of these regulations. These findings suggest that incumbent groups oppose disclosure rules because their passage threatens their private interests.
Suggested Citation: Suggested Citation