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Bank top management teams, disclosure, learning, survival and failure – 1990-2017

Bank top management teams, disclosure, learning, survival and failure – 1990-2017 Corporate financial communications concern public and private disclosure (Holland, 2005). This paper aims to explain how banks developed financial communications and how problems emerged in the global financial crisis. It explores policy responses.Design/methodology/approachBank cases reveal construction and destruction of the social, knowledge and economic world of financial communications over two periods.FindingsIn the 1990s, learning about financial communications by a “dominant coalition” (Cyert, March, 1963) in bank top management was stimulated by gradual change. The management learnt how to accumulate social and cultural capital and developed “habitus” for disclosure (Bourdieu, 1986). From 2000, rapid change and secrecy factors accelerated bank internalisation of shareholder wealth maximising values, turning “habitus” in “market for information” (MFI) (Barker, 1998) into a “psychic prison” (Morgan,1986), creating riskier bank cultures (Schein, 2004) and constraining learning.Research limitations/implicationsThe paper introduces sociological concepts to banking research and financial disclosures to increase the understanding about financial information and bank culture and about how regulation can avoid crises. Limitations reflect the small number of banks and range of qualitative data.Practical implicationsRegulators will have to make visible the change processes, new contexts and knowledge and connections to bank risk and performance through improved regulator action and bank public disclosure.Social Implications“Masking” and rituals (Andon and Free, 2012) restricted bank disclosure and weakened governance and market pressures on banks. These factors mediated bank failure and survival in 2008, as “psychic prisons” “fell apart”. Bank and MFI agents experienced a “cosmology episode” (Weick, 1988). Financial communications structures failed but were reconstructed by regulators.Originality/valueThe paper shows how citizens require transparency and contested accountability to democratise finance capitalism. Otherwise, problems will recur. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Financial Markets Emerald Publishing

Bank top management teams, disclosure, learning, survival and failure – 1990-2017

Holland, John
Qualitative Research in Financial Markets , Volume 11 (1): 29 – May 23, 2019
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References (56)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1755-4179
DOI
10.1108/qrfm-03-2018-0031
Publisher site
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Abstract

Corporate financial communications concern public and private disclosure (Holland, 2005). This paper aims to explain how banks developed financial communications and how problems emerged in the global financial crisis. It explores policy responses.Design/methodology/approachBank cases reveal construction and destruction of the social, knowledge and economic world of financial communications over two periods.FindingsIn the 1990s, learning about financial communications by a “dominant coalition” (Cyert, March, 1963) in bank top management was stimulated by gradual change. The management learnt how to accumulate social and cultural capital and developed “habitus” for disclosure (Bourdieu, 1986). From 2000, rapid change and secrecy factors accelerated bank internalisation of shareholder wealth maximising values, turning “habitus” in “market for information” (MFI) (Barker, 1998) into a “psychic prison” (Morgan,1986), creating riskier bank cultures (Schein, 2004) and constraining learning.Research limitations/implicationsThe paper introduces sociological concepts to banking research and financial disclosures to increase the understanding about financial information and bank culture and about how regulation can avoid crises. Limitations reflect the small number of banks and range of qualitative data.Practical implicationsRegulators will have to make visible the change processes, new contexts and knowledge and connections to bank risk and performance through improved regulator action and bank public disclosure.Social Implications“Masking” and rituals (Andon and Free, 2012) restricted bank disclosure and weakened governance and market pressures on banks. These factors mediated bank failure and survival in 2008, as “psychic prisons” “fell apart”. Bank and MFI agents experienced a “cosmology episode” (Weick, 1988). Financial communications structures failed but were reconstructed by regulators.Originality/valueThe paper shows how citizens require transparency and contested accountability to democratise finance capitalism. Otherwise, problems will recur.

Journal

Qualitative Research in Financial Markets – Emerald Publishing

Published: May 23, 2019

Keywords: Learning; Survival; Banks; Disclosure; Failure

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