Abstract
This research aims to enter in the debate about the pros and the cons of regulatory capital (RC) disclosure providing empirical evidences that this measure of capital is more value relevant than book value of equity (BV). To verify our hypothesis, we collected data from the consolidated annual reports issued over the period 2009–2012 by 170 entities listed in 22 of the 27 countries that belong to the Basel Committee and that issue their annual reports complying with the IASB standards. Methodologically, by using a modified version of the Ohlson (1995) model, we use five different techniques that confirm that the RC is more value relevant than BV. So, our findings show that not only RC is issued to strengthen the soundness and the stability of the international banking system and to diminish an existing source of competitive inequality among international banks, but also to provide useful information to investors for their economic decisions.
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