Banks’ Seasoned Equity Offerings Announcements and Central Bank Lending Operations

Massimo Giuliodori, Jan Kakes and Dimitris Mokas

Working Papers from DNB

Abstract: This paper studies the influence of central bank lending operations on the announcement effects of European banks’ seasoned equity offerings (SEOs). We find that larger participation in lending operations is associated with more negative cumulative abnormal returns following the announcement. This result supports the hypothesis that SEOs made by banks that rely more on central bank lending facilities show more negative signaling effects. However, these effects are short-lived and fade away after two trading days following the SEO announcement. Further, we find that offerings motivated by capital strengthening are more likely to signal overpriced equity.

Keywords: Banks; Bank capital; Seasoned equity offerings; Unconventional monetary policy (search for similar items in EconPapers)
JEL-codes: E52 E58 G14 G21 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-cba, nep-eec and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:748

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