NDLI: Debtholder Monitoring Incentives and Bank Earnings Opacity

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Debtholder Monitoring Incentives and Bank Earnings Opacity

Content Provider	Scilit
Author	Danisewicz, Piotr McGowan, Danny Onali, Enrico Schaeck, Klaus
Copyright Year	2020
Description	Journal: SSRN Electronic Journal We exploit exogenous legislative changes that alter the priority structure of different classes of debt to study how debtholder monitoring incentives affect bank earnings opacity. We present novel evidence that exposing nondepositors to greater losses in bankruptcy reduces bank earnings opacity, especially for banks with larger shares of nondeposit funding, listed banks, and independent banks. The reduction in earnings opacity is driven by a lower propensity to overstate earnings and becomes larger during crises, when the incentive to conceal capital shortfalls is stronger. Our findings highlight the importance of creditors’ monitoring incentives in improving the quality of information disclosure.
Related Links	https://research-information.bris.ac.uk/files/220185351/DPL_12_OCT_JFQA.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3525766
ISSN	10914358
e-ISSN	15565068
DOI	10.2139/ssrn.3525766
Journal	SSRN Electronic Journal
Language	English
Publisher	Elsevier BV
Publisher Date	2020-01-26
Access Restriction	Open
Subject Keyword	Journal: SSRN Electronic Journal Debtholder Monitoring Incentives Bank Earnings Opacity Earnings Management Debt Structure
Content Type	Text
Resource Type	Article
Subject	Public Health, Environmental and Occupational Health Psychiatry and Mental Health

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