Although regulators find this idea increasingly attractive, to evaluate banks’ risk-taking, investors need good information about a bank’s activities and balance sheet. In light of this, would stiffer mandatory disclosure requirements for banks — as in the recent Basel II proposal — be a good thing? While there are no definitive answers to this question, Mitchell Berlin reviews some recent economic literature that can offer useful insights to policymakers.
This article appeared in the Fourth Quarter 2004 edition of Business Review.
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