Economic Information and Finance : More Information Means More Credit, Fewer Bad Loans, and Less Corruption

This paper builds on recent work that shows how financial sector outcomes are affected by the provision of information by financial and other entities. In particular, it shows that an indicator of economic transparency is positively related to higher levels of private credit and a lower share of nonperforming loans even after accounting for factors commonly believed to influence financial sector development in cross-country empirical estimation. Timely access to economic data allows investors to make better decisions on investments and to better monitor banks' financial health. Greater economic transparency raises accountability and lowers corruption in bank lending.

Bibliographic Details

Main Author:	Islam, Roumeen
Language:	English
Published:	World Bank, Washington, DC 2007-06
Subjects:	ACCOUNTABILITY, ACCOUNTING, ADVERSE SELECTION, AGENTS, AUDITORS, AUDITS, BANK FAILURES, BANK LENDING, BANK LOANS, BANK PROFITS, BANK RELATIONSHIPS, BANK RUNS, BANKRUPTCY, BANKS, BORROWING, CAPITALIZATION, CENTRAL BANKS, CENTRALIZATION, COVERAGE, CREDIT MARKETS, CREDIT RATIONING, CREDIT RISK, DEBT, DECISIONMAKING, DEFAULT RISK, DEMAND CURVE, DEPOSIT INSURANCE, DEPOSITORS, DEPOSITS, ECONOMIC CONDITIONS, ECONOMIC INFORMATION, ECONOMIC OUTCOMES, ECONOMIC SITUATION, ETHNIC GROUPS, EXCHANGE RATES, EXPECTED RETURN, EXPECTED RETURNS, EXPENDITURES, EXPORTS, EXTERNAL FINANCING, EXTERNALITIES, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARIES, FINANCIAL MARKETS, FINANCIAL PERFORMANCE, FINANCIAL SECTOR, FOREIGN DIRECT INVESTMENT, GDP, GROWTH RATE, HOUSING, IMPERFECT INFORMATION, INFLATION, INFLATION RATE, INFORMATION ASYMMETRY, INFORMATION DISCLOSURE, INSTITUTIONAL DEVELOPMENT, INSURANCE, INSURANCE MARKETS, INTEREST RATE, INTEREST RATES, LABOR MARKETS, LAWS, MACROECONOMIC CONDITIONS, MONEY SUPPLY, MORAL HAZARD, MORTGAGE LOANS, PENALTIES, PERFECT INFORMATION, PORTFOLIO, PORTFOLIOS, PROBABILITY OF DEFAULT, PROFITABILITY, PROPERTY RIGHTS, PUBLIC GOOD, RECIPROCITY, REGULATORY FRAMEWORK, RISK MANAGEMENT, RISK PROFILES, SECURITIES, SOLVENCY, SUPERVISORY AGENCIES, SUPERVISORY SYSTEM, TRANSPARENCY, UNEMPLOYMENT, WAGE RATES,
Online Access:	http://documents.worldbank.org/curated/en/2007/06/7711498/economic-information-finance-more-information-means-more-credit-fewer-bad-loans-less-corruption https://hdl.handle.net/10986/7398
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