Bank Opacity and Systemic Risk

Mies, Michael

doi:10.2139/ssrn.3723044

Cited by 1 publication

(2 citation statements)

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“…This consequently can lead to exposure of bank runs and other forms of risks (Morgan, 2002). So, the effect of bank opacity on risk-taking behavior has been of interest to many researchers (Morgan, 2002;Fosu et al, 2017;Cao & Juelsrud, 2022;Mies, 2022;Rastogi & Kanoujiya, 2022).…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

“…While the banking sector in Egypt is considered as relatively mature (Chironga et al, 2018), it is still less grounded and stable as the Norwegian banking sector. Also, other studies about bank opacity tend to use other measures of opacity such as Analyst Forecast Error (Flannery et al, 2004;Fosu et al, 2017;Mies, 2022), Loan Loss Provision (Tran et al, 2022;Dang & Huynh, 2023), and the size of off-balance sheet items, relative to the on-balance sheet total assets (Cao &Juelsrud, 2022). Additionally, the majority of studies that used different measures of bank opacity are also performed in US or cross countries studies.…”

Section: Correlation Analysismentioning

confidence: 99%

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Bank Opacity and Risk-Taking: The Moderating Role of Competition

Bekir,

El-kheer,

Ganna

2023

مجلة البحوث المحاسبية

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Purpose: This study examines the influence of bank opacity on banks' risk-taking. It also investigates whether bank competition can affect the strength of the relationship between bank opacity and risk-taking.Design/Methodology/Approach: Using annual data obtained from 9 listed Egyptian banks over the 2010 -2019 period (10 years), the study assessed risk-taking using Z-score, bank opacity utilizing the ratio of Available-For-Sale (AFS) securities to Total Assets (TA), and competition is measured by Lerner Index. The Random Effect Generalized Least Square (RE GLS) model is utilized for empirical analysis.Findings: Results show that bank opacity has a negative insignificant effect on the financial stability of banks. Competition also has a negative insignificant effect on banks' stability. However, bank competition positively and significantly moderates the relationship between bank opacity and risk-taking. Originality/Value:The study contributes to the banking literature by offering evidence on opacity-related issues after the Global Financial Crisis (GFC) and the January 25th and June 30th uprisings in Egypt.

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