Recent developments in the cost of bank equity in Europe

Luis Fernández Lafuerza and Javier Mencía

Economic Bulletin, 2020, issue 4/2020, No 37

Abstract: This article assesses the cost of bank equity in Spain and the euro area since 2007, focusing particularly on the period of the COVID-19 pandemic. There was a marked rise in the cost of equity in March 2020, followed by a decline in the subsequent months. The article assesses the factors responsible for this movement, and compares it against the change in interest rates on alternative bank funding instruments.

Keywords: Cost of equity; bank funding; COVID-19. (search for similar items in EconPapers)
JEL-codes: E43 G12 G21 (search for similar items in EconPapers)
Date: 2020
Note: Analytical Articles
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Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2020:i:12:d:aa:n:37

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