The impact of voluntary capital adequacy disclosure on bank lending and liquidity creation

Natalya Zelenyuk*, Robert Faff, Shams Pathan

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Using a sample of 40 US banks that make voluntary disclosure of capital adequacy, we investigate the extent to which such voluntary disclosures influence growth in bank lending and liquidity creation. Combining two theories linked to the performance effects of (i) voluntary disclosure and (ii) leverage adjustment, we document novel evidence in favour of our hypotheses: a positive relation between voluntary bank disclosure and bank lending (liquidity creation). Our analysis provides some evidence that these positive linkages occur through a cost of capital channel.

Original languageEnglish
JournalAccounting and Finance
DOIs
Publication statusE-pub ahead of print - 18 Sep 2020
Externally publishedYes

Fingerprint Dive into the research topics of 'The impact of voluntary capital adequacy disclosure on bank lending and liquidity creation'. Together they form a unique fingerprint.

Cite this