Events

Professor Qi Chen
L. Palmer Fox Distinguished Professor of Business Administration
Fuqua School of Business
Duke University

Using variation in mandated disclosure requirements and depositor sophistication, we examine how banks with greater transparency into their asset fair values fare during the 2023 regional banking crisis. Analyzing a sample of over 3,600 U.S. banks, we find that banks with greater transparency experienced significantly larger uninsured deposit outflows and raised rates more aggressively during the crisis episode. Hazard models reveal that these effects emerged earlier and escalated more quickly for transparent banks. These results are consistent with theories linking ease of information acquisition to bank fragility and inform the ongoing debate on the merits of fair value transparency.