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Bank stock performance and bank regulation around the globe

Pelster, Matthias, Irresberger, Felix and Weiß, Gregor 2018. Bank stock performance and bank regulation around the globe. European Journal of Finance 24 (2) , pp. 77-113.

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We analyze the effect of bank capital, regulation, and supervision on the annual stock performance of global banks during the period of 1999–2012. We study a large comprehensive panel of international banks and find that higher Tier 1 capital decreases a bank's stock performance over the whole sample period. However, during turbulent times stocks of more highly capitalized banks perform significantly better. Additionally, we find strong evidence that banks that are more likely to receive government bailout during financial distress realize smaller stock performance. In contrast, we find no convincing evidence that banks that generate higher non-interest income have a higher performance.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
Uncontrolled Keywords: bank stock performance; bank regulation; capital; implicit bailout guarantee
Publisher: Routledge
ISSN: 1351-847X
Date of Acceptance: 1 August 2016
Last Modified: 18 Jul 2019 13:35

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