VoxEU Video

Bank opacity and profit maximisation

  • 14 May 2016

Banks' balance sheets are complicated and opaque, making it hard to assess their health. In this Vox Views video, Maryam Farboodi suggests that opacity is an intentional choice by banks. Banks want to maximise their profits by offering the lowest return possible to investors without scaring them away. They choose to provide just enough information to maximise profits. The video was recorded in April 2016 at the First Annual Spring Symposium on Financial Economics organised by CEPR and the Brevan Howard Centre at Imperial College.

A red triangular warning sign reading "MINAS" attached to a barbed wire fence in a grassy field, with promotional text overlay for "Clearing the path to growth" by VoxEU, CEPR, and VoxTalks with Tim Phillips, interviewing Mounu Prem.
VoxEU Talk

Clearing the path to growth

    ![](../../../../../../../../../../var/folders/34/zq18d8kx7kbgby0j06p_j6t40000gn/T/TemporaryItems/NSIRD_screencaptureui_EM2XPo/Screenshot 2022-01-04 at 17.01.16.png)
  • Development
    • ![](../../../../../../../../../../var/folders/34/zq18d8kx7kbgby0j06p_j6t40000gn/T/TemporaryItems/NSIRD_screencaptureui_EM2XPo/Screenshot 2022-01-04 at 17.01.16.png)
  • Political Economy