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Working paper

Transparency and Market Discipline: Evidence from the Russian Interbank Market

Guillemin F., Semenova M.
This paper investigates the role of bank voluntary disclosure, as a source of information about risk, in the interbank market. Using data on the 179 largest Russian banks over the period of 2004-2013 we test whether the ability to attract interbank loans is sensitive to various transparency indices such as those disclosing bank risks, board composition, or even corporate event details. We show that larger but riskier banks – at least in terms of credit risk – behave more transparently and disclose more. The article is also the first to provide evidence that the ability to attract funds in the interbank market is positively correlated with the degree of transparency. This result is stable for various aspects of disclosure.