Banks not necessarily more opaque than other firms – BIS paper
Study compares stock returns of those with insider knowledge against the wider market
Banks are somewhat opaque but not necessarily more so than other firms, according to a working paper published by the Bank for International Settlements.
Assessing opacity is challenging, note the authors, Fabrizio Spargoli and Christian Upper. Previous studies have tended to rely on measures that should be correlated with informational advantages of those inside the firm. Similarly, their approach is to assess whether trades of bank stock by insiders lead to abnormally high returns.
Their
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