This book provides a comprehensive overview of the role of disclosure regulation in the banking industry, emphasizing its importance for transparency, financial stability, and competition. Disclosure regulation helps improve the flow of information in capital markets, and post-2007–08 financial crisis, regulators pushed for increased transparency in the banking sector. Transparency can reduce uncertainty and improve risk management, benefiting banks by lowering the cost of capital and enhancing market discipline. However, excessive disclosure may lead to problems such as bank runs or increased investor uncertainty. The book also explores the evolving role of environmental disclosure in banking, particularly in light of climate change and natural disasters. It examines how banks are incorporating environmental risks into their lending activities and addressing the financial implications of climate change. The introduction of climate stress tests has raised banks’ focus on environmental risks and their impact on financial stability. By analysing the relationship between disclosure, financial stability, and green lending, I highlight how banks’ transparency about climate risks can improve their resilience and contribute to decarbonization. The book makes three key contributions: it reviews the role of disclosure in banking markets, explores the connection between accounting practices and financial stability, and underscores the importance of disclosure in preventing banking crises and promoting sustainability. The book argues that while too much transparency can cause instability, regulated disclosure can enhance long-term financial resilience and support the banking sector’s role in addressing climate change.

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Introduction

  • Sara Longo

摘要

This book provides a comprehensive overview of the role of disclosure regulation in the banking industry, emphasizing its importance for transparency, financial stability, and competition. Disclosure regulation helps improve the flow of information in capital markets, and post-2007–08 financial crisis, regulators pushed for increased transparency in the banking sector. Transparency can reduce uncertainty and improve risk management, benefiting banks by lowering the cost of capital and enhancing market discipline. However, excessive disclosure may lead to problems such as bank runs or increased investor uncertainty. The book also explores the evolving role of environmental disclosure in banking, particularly in light of climate change and natural disasters. It examines how banks are incorporating environmental risks into their lending activities and addressing the financial implications of climate change. The introduction of climate stress tests has raised banks’ focus on environmental risks and their impact on financial stability. By analysing the relationship between disclosure, financial stability, and green lending, I highlight how banks’ transparency about climate risks can improve their resilience and contribute to decarbonization. The book makes three key contributions: it reviews the role of disclosure in banking markets, explores the connection between accounting practices and financial stability, and underscores the importance of disclosure in preventing banking crises and promoting sustainability. The book argues that while too much transparency can cause instability, regulated disclosure can enhance long-term financial resilience and support the banking sector’s role in addressing climate change.