A mechanism for reducing opaqueness in financial institutions

The opacity of financial institutions has implications for financial stability, their management, and valuation. This is in large part due to the nature of the fundamental business model of banking which is based on asymmetric information. There is a mismatch between the terms of assets and loans.

The project is concerned with market-related and firm-specific statistical variation. The market model allows the variations in the individual stock's return to be divided into several components, primarily a market-related component and a firm-specific component.