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- W2297391519 abstract "The goal of achieving transparency has become more challenging in recent years as banks’ activities have become increasingly complex and dynamic, making it harder for outsiders to comprehend the full extent of banks’ exposures. In this study we examine various onand offbalance sheet activities that are thought to be responsible for increased bank opacity, where opacity is proxy by bid-ask spread, volume turnover, and analysts surprise diversion. Using a sample of 275 U.S. commercial banks listed on the NASDAQ/NYSE/AMEX from Q4-1999 to Q22012, our findings support the argument that banks off-balance sheet trading activities, in particular derivatives, are a significant source of opacity. This is followed by securitization, troubled loans, and secured loans. Our results support the suggestion that assets “slipperiness”, i.e., the speed with which banks trade in and out of their assets is the main driver of bank opacity. While we support the proposed move of derivatives trading from over-the-counter markets to clearing houses, where prices can be monitored, we believe that such a move is unlikely to significantly reduce bank opacity. Reducing opacity will require more timely and detailed disclosure on banks’ volatile trading exposures. JEL classification: G21, G14." @default.
- W2297391519 created "2016-06-24" @default.
- W2297391519 creator A5016757951 @default.
- W2297391519 date "2013-01-01" @default.
- W2297391519 modified "2023-09-27" @default.
- W2297391519 title "Complexity or Transparency: What Makes Banks Opaque?" @default.
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- W2297391519 doi "https://doi.org/10.2139/ssrn.2307787" @default.
- W2297391519 hasPublicationYear "2013" @default.
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