Disclosure, Runs and Bank Capital Raising
UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Discipline Group
Research Seminars in Finance
Topic: Disclosure, Runs and Bank Capital Raising
Speaker: Jean Helwege, University of California, Riverside/ANU
Abstract:
Banks often must raise equity in a crisis despite having weak prospects. By increasing disclosure at such times, banks may benefit from a more precise estimation of firm risk and thus a lower cost of capital. But they may also reveal that bank capital is dangerously low, which could hamper equity issuance (the Hirshleifer effect) or trigger a bank run by uninsured depositors. We investigate the costs and benefits of greater disclosure during the subprime crisis. Our findings suggest that disclosure slightly improves capital raising, but it also leads to withdrawals of uninsured deposits. Thus, the overall impact on bank health is slightly negative
A light lunch will be provided at 1.00 p.m. Please RSVP for catering purposes to Mala Kapahi by 12 noon on Monday, 23rd July 2018.
Date: Wednesday, 25th July 2018
Time: 12.00 – 1.00 p.m.
Venue: University of Technology, Sydney
Building 8, Room 8.002, Dr Chau Chak Wing Building
Dr Chau Chak Wing Building
Dr Chau Chak Wing Building
14 - 28 Ultimo Road, Ultimo
Enquiries: Mala Kapahi (Ph: +61 2 9514 7777)
