This study investigates whether bank disclosures are useful in predicting bankfailure by focusing on the core quantitative information disclosed by Japanese banks.The informative value of the financial data is tested against the experience of bankfailure during the recent banking crisis. The study finds that bank quantitativedisclosures convey information which is potentially useful in predicting bank failure.Its empirical results, however, also show that the predictive value of the coredisclosures may be significantly reduced in the presence of the perverse investmentbehavior of insolvent banks.