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Using a sample of public and private banks, we study how social capital relates to bank stability. Social capital, which reflects the level of cooperative norms in society, is likely to reduce opportunistic behavior (Jha and Chen 2015; Hasan et al., 2017) and, therefore, act as an informal monitoring mechanism. Consistent with our expectations, we find that banks in high social capital regions experienced fewer failures and less financial trouble during the 2007–2010 financial crisis than banks in low social capital regions. In addition, we find that social capital was negatively associated with abnormal risk-taking and positively associated with accounting transparency and accounting conservatism in the pre-crisis period of 2000–2006, indicating that risk-taking, accounting transparency, and accounting conservatism are possible channels through which social capital affected bank stability during the crisis. [ABSTRACT FROM AUTHOR]

A study on market reaction regarding public announcement of going-concern (GC) opinions through news media is presented. The decision of NASDAQ and AMEX stock markets, early in 2000s, to require firms listed in their exchanges to publicly announce previously disclosed information. This study found abnormal stock return volatility at the re-release of such information.