Stock market effects of silicon valley bank and credit suisse failure: evidence for a sample of european listed banks

António Miguel Martins

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: This paper examines the short-term market reaction of Silicon Valley Bank and Credit Suisse failure in the European banking industry. Using an event study, I show that stocks react significantly negatively to those two bank failure events. The general drop in value seen in the sector is explained by systemic contagion, panic and information asymmetries and uncertainty returns. These reactions are reinforced or mitigated by bank-specific characteristics such as liquidity, interest margin, risk aversion, operational efficiency, and institutional ownership.

Keywords: Banks Failure; Market reaction; Event study; Contagion (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006682

DOI: 10.1016/j.frl.2023.104296

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