Financial and Banking Strategic Studies

Information transparency and financial reporting quality in the banking system as determinants of customer trust in the value of national currency under inflationary conditions: the mediating role of perceived fairness and legal protection of stakeholders

Document Type : Original Article

Authors

Rahim Milani 1
Hassan Gharibi 2
Jamal Bahri 3
Mousa Eslamian 4

1 Department of Law, Private Law, Islamic Azad University, Tehran Central Branch, Tehran, Iran; General Directorate of Special and International Litigation, Bank Sepah, Iran.

2 Department of Business Management, Transformation Management, Allameh Tabataba’i University, Faculty of Management and Accounting, Tehran, Iran.

3 Chairman of the Board of Directors at Sarmayeh Bank.

4 CEO and Member of the Board of Directors at Sarmayeh Bank.

https://doi.org/10.22105/fbs.2026.252805
Abstract
Purpose: This paper aimed to explain the effect of information transparency and financial reporting quality of banks on customers’ trust in the value of the national currency, with perceived fairness and the legal protection of stakeholders as mediating variables, given the importance of such trust under inflationary conditions and its role in the effectiveness of monetary policy, inflation control, and banking system stability.
Methodology: This research employed a descriptive–survey and correlational design. The statistical population consisted of individual customers of banks in Tehran, from whom 400 respondents were selected using a combined sampling method. Data were collected through a researcher-developed questionnaire containing 68 items and analyzed using structural equation modeling through the partial least squares method and the Sobel test.
Findings: The results showed that all twelve research hypotheses were significant. Among the direct paths, legal protection had the strongest effect on trust (0.448), followed by perceived fairness (0.302), whereas the direct effects of information transparency (0.103) and financial reporting quality (0.098) were weaker but significant. In addition, the indirect effects of information transparency on perceived fairness (0.075), financial reporting quality on perceived fairness (0.129), information transparency on legal protection (0.068), and financial reporting quality on legal protection (0.091) were all significant at the 0.01 level. The VAF values ranged from 0.398 to 0.569. The coefficient of determination for trust was 0.681, while the GOF = 0.603 and SRMR = 0.062 indices indicated an appropriate model fit.
Originality/Value: The originality of this research lies in developing and testing a model that explains the role of information transparency and financial reporting quality of banks in shaping customers’ trust in the value of the national currency, while simultaneously considering the mediating roles of perceived fairness and the legal protection of stakeholders. The findings indicate that, under inflationary conditions, these factors contribute to restoring customers’ trust in the value of the national currency not only through their direct effects but, more importantly, through strengthening perceived fairness and legal protection.

Keywords

Banking information transparency
Financial reporting quality
Perceived fairness of banking stakeholders
Legal Protection of banking stakeholders
Customers' trust in national currency value
Inflationary conditions
Subjects
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Financial and Banking Strategic Studies
Volume 4, Issue 2
Summer 2026
Pages 131-159

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