Narrative disclosure tone and bank risk: the role of economic policy uncertainty

Acheampong, A ORCID: https://orcid.org/0000-0002-9489-5751, Ibeji, N, Freeman, OB and Nguyen, T, 2025. Narrative disclosure tone and bank risk: the role of economic policy uncertainty. Managerial and Decision Economics. ISSN 0143-6570

Preview

Text 2428002_Acheampong.pdf - Published version Download (1MB) | Preview

Abstract

This study examines the impact of narrative disclosure tone (NDT) on bank riskiness, particularly in the context of heightened economic policy uncertainty (EPU). Utilizing data from 114 banks across 2052 bank-year observations between 2005 and 2022, our findings reveal a significant positive relationship between NDT and various measures of bank risk, including credit, liquidity, operational, and market risks. The results demonstrate that a negative tone in narrative disclosures heightens perceived and actual risk, with this effect being further amplified during periods of high EPU. Our study highlights the strategic importance of narrative disclosures in managing stakeholder perceptions and highlights the need for banks to carefully consider their communication strategies in volatile economic environments. These findings offer practical insights for banking institutions, regulators, and investors in understanding the complex dynamics between narrative tone, economic uncertainty, and financial risk.

Item Type:	Journal article
Publication Title:	Managerial and Decision Economics
Creators:	Acheampong, A., Ibeji, N., Freeman, O.B. and Nguyen, T.
Publisher:	Wiley
Date:	13 April 2025
ISSN:	0143-6570
Identifiers:	Number Type 10.1002/mde.4539 DOI 2428002 Other
Rights:	© 2025 the author(s). Managerial and Decision Economics published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
Divisions:	Schools > Nottingham Business School
Record created by:	Jonathan Gallacher
Date Added:	16 Apr 2025 13:33
Last Modified:	16 Apr 2025 13:33
URI:	https://irep.ntu.ac.uk/id/eprint/53418

Actions (login required)

Edit View

Statistics

Views

Downloads