Disclosure, transparency, and market discipline

The aim of this paper is to examine what has been the role of information provision to the market throughout the crisis. We consider two main sources of information to the market, financial statements and information pro
The aim of this paper is to examine what has been the role of information provision to the market throughout the crisis. We consider two main sources of information to the market, financial statements and information provided by credit rating agencies. We examine how these sources of information work and the effectiveness of their disclosure process during the crisis. Contrary to the commonly held view, fair value accounting did not have a major impact on the crisis development and severity. However, the structure and lack of accountability of credit rating agencies had a profound impact on their incentives, which may have jeopardized the accuracy of the whole rating process. We claim that the crisis experience has changed the way we think about information as well as market discipline and discuss policy implications and proposals for regulation. JEL Classification: G01, G24, G28, M41, M48 
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Metadaten
Author:Xavier Freixas, Christian Laux
URN:urn:nbn:de:hebis:30-101935
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2011,11
Series (Serial Number):CFS working paper series (2011, 11)
Document Type:Working Paper
Language:English
Year of Completion:2011
Year of first Publication:2011
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2011/04/29
Tag:Banks; Credit Rating Agencies; Fair-Value Accounting; Financial Crisis; Financial Institutions; Mark-to-Market; Regulation
Issue:March 2011
Pagenumber:43
HeBIS PPN:245941266
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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