Information disclosure and bank risk-taking: Empirical evidence from Vietnam

Abstract

This paper explores the impact of information disclosure and transparency on Vietnamese banks’ risk-taking by using the Generalized Method of Moments (GMM) approach with panel data of 28 Vietnamese commercial banks from 2007 to 2019. A notable new contribution of the study is authors constructed a disclosure index for Vietnamese banks and evaluate the impact of bank transparency on bank risk-taking through this index. Research results show that the more transparent and complete information a Vietnamese commercial bank discloses, the safer the bank is. Furthermore, the findings indicate that implementing Basel II improves the influence of transparency and information disclosure on commercial banks' Z-scores substantially.

Keywords

• Information disclosure, Transparency, Bank, Risk-taking, Vietnam.