Precision of Public Information Disclosures, Banks’ Stability and Welfare

We study the optimal precision of public information disclosures about banks assets quality. In our model affects banks' cost raising funding and asset profile riskiness. an imperfectly competitive banking sector, banks'stability social surplus are non-monotonic functions precision: intermediate (or low-to-intermediate if contract their repayment promises on information) maximizes stability, also yields maximum when bank failure c is large. When small risk taking not too sensitive to changes in precision, (and risk) reached at maximal precision. a perfectly sector which information, while stability minimal