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Are Risk Management Disclosures Informative or Tautological? Evidence from the U.S. banking sector

Jizi, M.I.; Dixon, R.

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Authors

M.I. Jizi



Abstract

Banks experienced increasing risk levels during the latest financial crisis. Investors’ confidence was shaken by the effectiveness of bank risk management practices, which has opened new challenges for bank management in approaching its risk. Understanding and communicating adopted risk management mechanisms is likely to provide insights and enable diagnosis on firm risk exposure. Conveying data that reduces information asymmetry might be reflected on stock performance. Investigating the impact of risk management disclosures content on stock price change and return volatility, using a sample of U.S. national commercial banks during 2009–2010, shows that informative risk management disclosures seems to be valued by investors. This is reflected on current-year stock prices and reduces the subsequent-year return variances.

Citation

Jizi, M., & Dixon, R. (2016). Are Risk Management Disclosures Informative or Tautological? Evidence from the U.S. banking sector. Accounting Perspectives, 16(1), 7-30. https://doi.org/10.1111/1911-3838.12134

Journal Article Type Article
Acceptance Date Mar 16, 2016
Online Publication Date Mar 7, 2017
Publication Date Apr 1, 2016
Deposit Date Apr 12, 2016
Publicly Available Date Mar 28, 2024
Journal Accounting Perspectives
Print ISSN 1911-382X
Electronic ISSN 1911-3838
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 16
Issue 1
Pages 7-30
DOI https://doi.org/10.1111/1911-3838.12134
Public URL https://durham-repository.worktribe.com/output/1414708

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Copyright Statement
This is the accepted version of the following article: Jizi, M. I. & Dixon, R. (2017). Are Risk Management Disclosures Informative or Tautological? Evidence from the U.S. banking sector. Accounting Perspectives 16(1): 7-30, which has been published in final form at https://doi.org/10.1111/1911-3838.12134. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.




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