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Author:

• Dr. Liangliang JIANG
  Associate Professor
  Department of Economics
  Lingnan University

Abstract:

Did regulatory reforms that lowered barriers to competition among U.S. banks increase or decrease the degree to which banks manipulate the information that they disclose to the public and regulators? We find that relaxing regulatory impediments to competition reduced discretionary loan loss provisioning and the frequency with which banks restate financial statements. The results suggest that competition reduces bank opacity, enhancing the ability of markets and regulators to monitor banks.