Disclosure Regulation in the Hands of Bank Regulators

49 Pages Posted: 10 Jul 2019 Last revised: 10 Jul 2020

See all articles by Sehwa Kim

Sehwa Kim

Columbia University - Columbia Business School

Seil Kim

Baruch College, City University of New York

Date Written: July 9, 2020

Abstract

Using a unique setting in U.S. banking regulation where stand-alone banks submit filings to bank regulators, we examine the consequences of disclosure regulation in the hands of bank regulators. We find bank regulators are less concerned about transparency than the SEC. Bank regulators’ disclosure requirements are less strict, and the disclosure system maintained by bank regulators generate higher information-processing costs. Consistently, stand-alone banks make fewer disclosures and are more likely to violate filing deadlines. In addition, market reaction to filings by stand-alone banks are less timely, suggesting a cost to stock price efficiency. We also examine potential benefits of the reduced emphasis on transparency, such as timelier regulatory intervention and fewer runs on deposits. However, we do not find evidence supporting these potential benefits.

Keywords: Banks; regulation; transparency; FDICconnect; SEC EDGAR; filings; insider trading

JEL Classification: G14, G21, G28, M41, M48

Suggested Citation

Kim, Sehwa and Kim, Seil, Disclosure Regulation in the Hands of Bank Regulators (July 9, 2020). Baruch College Zicklin School of Business Research Paper No. 2019-07-01, Available at SSRN: https://ssrn.com/abstract=3416204 or http://dx.doi.org/10.2139/ssrn.3416204

Sehwa Kim (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Seil Kim

Baruch College, City University of New York ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
95
Abstract Views
939
rank
303,977
PlumX Metrics