The Opaqueness of Fair Value Assets and Systematic Risk in the Banking Industry
Year: 2011
Type: article
Abstract: Opacity has economy-wide implications. A lack of information, whether from non-disclosure or complexity of business, creates uncertainty that even the most sophisticated of investors must face. In this paper, I analyze the relationship between opacity and the systematic risk of bank holding companies. Specifically, I find that investments in opaque assets required to be reported at fair value significantly affect the levels of financial institutions’ systematic risk. Furthermore, I provide evidence that firm investments in opaque assets contribute to systematic risk to an even greater degree during times of financial crisis.
Author: Jody Wayne Bland
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2626443356