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Disclosure and bank risk: Evidence from European banks

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  • Altunbaş, Yener
  • Khan, Atiqur
  • Thornton, John

Abstract

We employ a self-developed dictionary designed to analyze bank financial statements to study the link between disclosure and bank risk in a sample of 225 European banks over the period 2011–2017. Disclosure is associated with reduced default risk for all but the most aggressive risk-taking banks, with the result weakly conditional on capital strength. At the same time, disclosure appears to increase systemic risk for European banks.

Suggested Citation

  • Altunbaş, Yener & Khan, Atiqur & Thornton, John, 2023. "Disclosure and bank risk: Evidence from European banks," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008711
    DOI: 10.1016/j.frl.2023.104499
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    More about this item

    Keywords

    Disclosure; Bank risk; European banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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