The Operational Risk Disclosure Practices of Banks: Evidence from India and Romania

28 Pages Posted: 3 Jul 2019

See all articles by Muneesh Kumar

Muneesh Kumar

University of Delhi - Department of Financial Studies

Harshmeeta Soni

University of Delhi - Department of Financial Studies

Mihaela Mocanu

Bucharest University of Economic Studies

Date Written: June 28, 2019

Abstract

The disclosure of information by banks is beneficial to several categories of the public as well as to the stability of the financial system. Operational risk disclosures are particularly important, since operational losses may impact both the financial condition and the reputation of banks. This paper compares the levels of operational risk disclosure in the banking industries of India and Romania. We develop an unweighted disclosure index with forty-three items, with data collected from the 2015 annual reports of all commercial banks in India and Romania. We then perform a regression analysis to investigate the extent to which banks’ characteristics impact the level of operational risk disclosure in these two countries. First, our results reveal a similarly low level of disclosure, namely an overall index average of 27% in the case of India and of 29% in the case of Romania. These results are surprising, as India’s culture appears to be more inclined toward transparency than Romania’s. Second, our results point toward a positive association between bank size and the level of operational risk disclosure. This paper contributes to the existing body of research, which comprises few empirical studies on the particular topic of operational risk disclosure in banks.

Keywords: disclosure, transparency, operational risks, banks, India, Romania

Suggested Citation

Kumar, Muneesh and Soni, Harshmeeta and Mocanu, Mihaela, The Operational Risk Disclosure Practices of Banks: Evidence from India and Romania (June 28, 2019). Journal of Operational Risk, Vol. 14, No. 2, 2019. Available at SSRN: https://ssrn.com/abstract=3413778

Muneesh Kumar

University of Delhi - Department of Financial Studies ( email )

University Road
Delhi, 110 007
India

Harshmeeta Soni

University of Delhi - Department of Financial Studies ( email )

University Road
Delhi, 110 007
India

Mihaela Mocanu (Contact Author)

Bucharest University of Economic Studies ( email )

Tache Ionescu street, no. 11, sector 1
Bucharest
Romania

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
2
Abstract Views
242
PlumX Metrics