Bank Asset Transparency and Credit Supply

49 Pages Posted: 27 Apr 2017 Last revised: 23 Sep 2019

See all articles by Karthik Balakrishnan

Karthik Balakrishnan

Rice University - Jesse H. Jones Graduate School of Business

Aytekin Ertan

London Business School

Date Written: July 3, 2019


We employ the European Central Bank’s Loan-level Reporting Initiative as a shock to banks’ asset disclosures. We find that, after the regulation, treatment banks raise more capital at cheaper rates and increase lending. Using novel survey data on small businesses, we also document that, in regimes with heightened bank disclosures, borrowers receive greater funding, conditional on their demand for credit. Furthermore, companies whose relationship banks provide asset disclosures start to borrow and invest more, relative to other firms from the same country and industry. Collectively, our inferences suggest that asset disclosures alleviate the capital market frictions that banks face and allow them to supply more credit to the real economy.

Keywords: Asset Disclosures; External Financing; Credit Supply; Bank Regulation; Real Effects; Small Businesses

JEL Classification: G21, G28, G32, M41, M48

Suggested Citation

Balakrishnan, Karthik and Ertan, Aytekin, Bank Asset Transparency and Credit Supply (July 3, 2019). Available at SSRN: or

Karthik Balakrishnan

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Aytekin Ertan (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
00442070008131 (Phone)


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