Mandatory Financial Disclosures and the Banking Sector

This book explores mandatory disclosures. The book raises questions regarding the efficacy of market discipline and reaches a conclusion that seems to be borne out by the recent failure of Silicon Valley Bank and Credit Suisse. The book starts by asking the question why do we need mandatory disclosures. First, it develops a framework using a Principal-Agent model that provides an economic rationale for such disclosures. Second, it analyses the requirements outlined in Basel banking regulations over three decades and finds support for the propositions outlined in the developed framework in all key BCBS pronouncements. Last, the book empirically evaluates Pillar 3 disclosures and arrives at the surprising result that such disclosures do not seem have an impact on bond investors. The book concludes by outlining the policy implications regarding the design, efficacy, implementation, and limitations of regulation in an economy.

Analyses the regulatory pronouncements of the Basel Committee on Banking Supervision (BCBS) over three decades Evaluates the extent to which mandatory disclosures are taken on board by market participants Outlines policy implications on the design, efficacy, implementation, and limitations of regulation in an economy

Auteur
Kumar Dasgupta is currently a Visiting Faculty in Accounting at the University of Cambridge, Judge Business School, UK and also the Technical Director (part-time) at the IVSC, the body responsible for setting global standards on valuations. Prior to this Kumar was Technical Director at the IFRS Foundation, and was responsible for projects relating to financial instruments accounting. Prior to his involvement in standard setting, Kumar was a partner in PricewaterhouseCoopers.

Contenu

1. Introduction.- 2. The Enigma of Mandatory Disclosures.- 3. Mandatory Disclosures as a Principal Agent Paradigm.- 4. Information asymmetry and banking regulations.- 5. Information content and pillar 3 disclosures.- 6. Conclusion.