The effects of the financial crisis and Basel III on banks’ risk disclosure: A textual analysis

Avinoam Blum, Alon Raviv

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We study the effects of the 2008 crisis and Basel III guidelines on the content of the financial reports of Israeli banks, which are highly regulated and follow the Basel guidelines. Our findings, which are based on LDA topic modeling and term frequency, indicate that already at the time of the crisis, Israeli banks had shifted the focus of their reports from market risk to credit and liquidity risks. The introduction of Basel III amplified this trend, where the reports focused on the new regulations of leverage and liquidity coverage ratios, while neglecting market risk and VaR methods.

Original languageEnglish
Article number103680
JournalFinance Research Letters
Volume53
DOIs
StatePublished - May 2023

Bibliographical note

Publisher Copyright:
© 2023

Keywords

  • Banks
  • Basel III
  • Financial crisis
  • Financial reports
  • LDA
  • Topic modeling

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