Banks are believed to be opaque to outsiders, since opacity is a property of the assets that they hold. A social planner would like banks to be transparent, riskless and highly efficient intermediators of liquidity. However, these goals appear to be conflicting. Whether and how opacity and...

This paper provides novel evidence that consumers react in response to privacy violations, where their personally identifiable information is exposed to unauthorized parties. Exploring privacy breach incidences of U.S. banks, we find that depositors reallocate significant wealth holdings away...