Public Law Studies Quarterly

Public Law Regulations on Disclosure of Information by Listed ‎Banks in the Conflict Between the Requirements of Capital and Money ‎Markets

Document Type : Article

Authors

Mahmood Bagheri 1
Mehrnoosh Hemmati Khalili 2

1 Associate Prof., Department of Private Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran

2 . A. in International Trade Economic Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran

https://doi.org/10.22059/jplsq.2024.331999.2912
Abstract
With the acceptance of private banks as issuers of securities in the stock market, the capital and money markets have interacted through listed banks. In public law, we aim to maintain social order and stability; thus, examining the banking system's emphasis on preserving systemic stability versus the capital market's focus on transparency and protecting shareholders' rights is of great importance. In this research, banks are considered a distinct entity, as they have a direct relationship with the formation of trust in society.
It seems more appropriate for the regulatory authority to expect full transparency from banks according to regulations, but to be more cautious regarding the public disclosure of information that could undermine public trust and put systemic stability at risk. Additionally, similar to the European Union, which accepts delays in the disclosure of banking information in its market abuse regulations, we can establish regulations in this area. In practice, this tension has also existed in the Iranian capital market in recent years, and we have witnessed complaints against the managers of such banks who faced penalties due to the failure to disclose information in a timely manner.

Keywords

systemic stability
‎shareholders’ rights
‎transparency
conflict ‎between capital market ‎and money market ‎regulations
conflict ‎between shareholders’ ‎rights and depositors’ ‎rights
mandatory ‎disclosure of information.‎
Subjects

  1. English

    1. A) Books
    2. Kregel, J. (2013). Political Economy Approaches to Financial Crisis. The Handbook of the Political Economy of Financial Crises.

     

    1. B) Articles
    2. Avgouleas, E. (2009). The Global Financial Crisis and Disclosure Paradigm in European Financial Regulation: the case for reform. European Company and Financial Law Review, 6( 4). 1-41.
    3. Bagheri, M., & Nakajima, C. (2006). Optimal Level of Financial Regulation under the GATS: A Regulatory Competition and Cooperation Framework for Capital Adequacy and Disclosure of Information. Journal of International Economic Law, 507-530. https://doi.org/10.1093/jiel/5.2.507
    4. Białek-Jaworska, A., & Matusiewicz, A. (2015). Determinants of the level of information disclosure in financial statements prepared in accordance with IFRS. Accounting and Management Information Systems, 14(3). 453-482.
    5. Blom, , & Schoenher, T. (2011). Supply chain risk management in financial crises A multiple case study approach. international journal of production economics, 134(1), 43-57. DOI:10.1016/j.ijpe.2011.01.002
    6. Di Tella, S. (2019). Optimal Regulation of Financial Intermediaries. American Economic Review, 109 (1), 271-313. DOI: 10.1257/aer.20161488.
    7. Federal Reserve Bank of New York Group ( 2016). Behavioral Risk Management in the Financial Services Industry: The Role of Culture, Governance, and Financial Reporting. Federal Reserve Bank of New York Economic Policy Review , 22(1). 1-177
    8. Federal Reserve System Study Group on Disclosure (2000). Improving Public Disclosure in Banking. Board of Governors of the Federal Reserve System Board of Governors of the Federal Reserve, 1-39.
    9. McCallum, M. (2017). Banking and Interest Rates in Monetary Policy Analysis: A Quantitative Exploration. Journal of Monetary Economics, Elsevier. 54(5), 1480-1507.
    10. Mitchener, K.(2004). Bank Supervision, Regulation, and Instability During the Great Depression. NATIONAL BUREAU OF ECONOMIC RESEARCH, 152-185. DOI: https://doi.org/10.1017/S0022050705050060
    11. Prates, M. (2013). Why Prudential Regulation Will Fail toPrevent Financial Crises.‌A Legal Approach. banco central do brasil. 1-33.
    12. Stulz, R. M. ( 2008). Securities Laws, Disclosure and National Capital Market, Pennsylvania: National Bureau of Economic Research,. 349-390
    13. Tarullo, D. (2004). Rethinking the Aims of Prudential Regulation. Chicago: Federal Reserve Bank of Chicago, Bank Structure Conference, 1-17.
    14. Dang, T.; Gorton, G.; Holmström, B.; Ordoñez, G. (2014). Banks As Secret Keepers. Nber Working Paper 107 (4), 1005-1029. DOI: 10.1257/aer.20140782
    15. Ursel, B., & Erlend, N. (2004). Disclosure, Volatility and Transparency: An Empirical Investigation into the Value of Bank Disclosure. FRBNY Economic Policy Review, 31-45.
    16. White, W. R. (2013). The Prudential Regulation Offinancial Institutions: Whyregulatory Responses To Thecrisis Might Not Prove Sufficient, The school of public policy, Calgray university, SPP research papers, 6, (33), 1-33.

     

    C)Thesis

    1. Basaran, B. (2018). Optimal Level of Transparency and Disclosure of Information: The Dialectic of Transparency and disclosure vis-à-vis confidentiality in the Banking Sector. Institute of Advanced Legal Studies School of Advanced Study University of London PHD Thesis.1-435

     

    D)Websites

    1. www.marketbusinessnews.com/financial-glossary/bank-capital/Market Business News – 2018/06/30

     

    References In Persian:

    1. A) Books
    2. Alahdad, M.; Moghaddam, V.; Zanjani, M.; Moddaresi, M. ( 2009). Financial and economic crisis and the need to limit the structure in the country's Islamic banking system. Tehran: Iran banking institute central bank of Iran (In Persian).
    3. Bagheri, M.; Sadeghi, M.; ShooshiNasab, N.; Sefidari, S.; Nikbakht, F. (2016). Competition and monopoly between banks and credit institutions. Tehran: Boursepub (In Persian).
    4. Hadi Zonooz, B. (2013). Evaluating the performance of the money and credit market in Iran and its consequences on economic growth. Tehran: Novintarahan (In Persian).
    5. Soltani, M. (2017). Capital Market Law. Tehran:Samt. DOI: 346.55092 (In Persian).
    6. Valinezhad, M. (2017). The set of laws and regulations governing banks and credit institutions. Tehran:Monetary and Banking Research Institue (In Persian).

     

    1. B) Articles
    2. Arjmandnezhad, A. (2005) Core principle for effective Banking Supervision (Ball Committee Core principle) Tehran: Ravand, (45), 57-86 (In Persian).
    3. Aslizade, A.; Barandepour Mahram, A.; Saremi, H. (2017) Risk management and Basel rules in Iranian banks. Studies of Economy. Financial Management and Accounting, 3(2), 13-114 (In Persian).
    4. Ebrahimi, M. (2012). Civil liability arising from violation of information disclosure regulations in stock transactions. Journal of Securities Exchange, (15), 161-189 (In Persian).
    5. Fallah Shams, M., & Abbaszade, H. (2007). Comparative comparison of capital adequacy in the first and second statements of the Ball committee. Ravand, (54 & 55), 11-38 (In Persian).
    6. Mirzayi, H.; Nazarian, R.;Bagheri, R. (2011). Investigating factors affecting the credit risk of banks. Ravand. 58, 87-98 (In Persian).
    7. Rahmani, A. (2007). Improving the quality of banks' reporting. Hesabdar, (188),1-10 (In Persian).

     

    Thesis

    1. Abbaspoor, S. (2018). Legal analysis of prudential regulations in Iran's banking regulatory system. Imam Sadiq University. M.A. Thesis (In Persian).
    2. Samadi, A. (2014) .Regulations governing the disclosure of information in the capital market. University of Tehran. M.A. Thesis (In Persian).
Public Law Studies Quarterly
Volume 54, Issue 4
Winter 2025
Autumn 2024
Pages 2223-2242

  • Receive Date 01 November 2021
  • Revise Date 31 May 2023
  • Accept Date 23 December 2023

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