Authors: Christos Grose, Mihaela Mocanu

Title: Pessimism in the disclosure of european banks during periods of crisis

Abstract

Our paper focuses on the disclosures of banks before and after the onset of the Covid-19 pandemic. We investigate the determinants of the pessimistic tone in the annual financial reports published by the ten largest banks in Europe. Results show that a bank with higher profitability uses a more pessimistic tone and older banks disclose information in a more pessimistic manner. Moreover, banks with a higher non-performing loans ratio are more pessimistic in disclosure. Lastly, the higher the depositor confidence, the less pessimistic the tone of the disclosure in the annual reports by banks.