U.S. Banks, Crises, and Bailouts: From Mexico to LTCM

René Stulz

No 7529, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the impact on bank stock prices of emerging market currency crises and bailouts. The stock market distinguishes between banks with exposure to a crisis country and other banks. In general, banks with exposures to a crisis country are affected adversely by currency events and positively by bailouts. Other banks are mostly unaffected by events in countries experiencing a crisis. The paper uses the impact of the LTCM crisis on bank stock prices to put the emerging market events in perspective. The LTCM crisis had no significant contagion effects in the banking sector either, but banks that participated in the LTCM rescue experienced negative stock returns when the rescue was announced.

JEL-codes: F3 F33 (search for similar items in EconPapers)
Date: 2000-02
New Economics Papers: this item is included in nep-ifn and nep-mon
Note: AP CF IFM
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Citations: View citations in EconPapers (59)

Published as Bong-Chan Kho & Dong Lee & Rene M. Stulz, 2000. "U.S. Banks, Crises, and Bailouts: From Mexico to LTCM," American Economic Review, American Economic Association, vol. 90(2), pages 28-31, May.

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Journal Article: U.S. Banks, Crises, and Bailouts: From Mexico to LTCM (2000)
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