Record Details

Relevance of risk information for depositors’ judgment and decision-making

Journal of Economic & Financial Studies

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Field Value
 
Title Relevance of risk information for depositors’ judgment and decision-making
 
Creator Jordan, Kathrin
Homölle, Susanne
 
Subject —
Risk disclosure; Risk reporting; Risk management.
C12; G21; M41.
 
Description For several years risk reporting of banks has been high on the agenda. Banks must disclose information on their risk exposure to enhance market discipline. As a precondition for this positive effect of risk reporting, the risk information provided by the banks must be relevant for the depositors' and other investors’ judgments and decisions. In this paper, we analyze whether this is really true. Using an experimental design we show that risk information may influence the individuals’ judgments and decisions. We find that positive (negative) risk information lead to more positive (more negative) evaluations. In the case of conspiring risk and financial statement information the judgments and decisions are most pronounced. However, this enhancing effect of risk information is not significant. Considering opposing risk and financial statement information we find that positive (negative) risk information lead to more positive/less negative (more negative/less positive) judgments and decisions. Risk information can even reverse the effect of opposing financial statement information on the individuals’ judgment of the banks’ risk exposure.
 
Publisher LAR Center Press
 
Contributor —
 
Date 2015-06-22
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journalofeconomics.org/index.php/site/article/view/158
10.18533/jefs.v3i03.158
 
Source Journal of Economic & Financial Studies; Vol 3, No 03 (2015): June; 15-28
2379-9471
2379-9463
 
Language eng
 
Relation http://journalofeconomics.org/index.php/site/article/view/158/150
 
Rights Copyright (c) 2015 Kathrin Jordan, Susanne Homölle
http://creativecommons.org/licenses/by-nc/4.0