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  • Thumbnail for The impact of international information disclosure requirements on market discipline
    The impact of international information disclosure requirements on market discipline by Leyshon, Kirby I.

    Financial regulators are challenged with finding the most efficient and effective ways to monitor banks given an expanding and complex international financial system. Market discipline has grown in importance as a way to incentivize banks from taking on unnecessary risk (Barth et al., 2004; Nier & Baumann, 2006). One of the main drivers of market discipline is information disclosure. While the literature on market discipline is expansive, there are no known studies on the impact of individual information disclosure requirements on market discipline. Our study investigates which specific disclosure requirements influence financial investors to discipline banks and which do not. We find that half of the information disclosure requirements potentially reduce market discipline practices while the other half may enhance financial investors’ response to bank risk.