EconPapers    
Economics at your fingertips  
 

Bail-in regulation and stock market reaction

Franco Fiordelisi, Federica Minnucci, Daniele Previati and Ornella Ricci

Economics Letters, 2020, vol. 186, issue C

Abstract: In response to the global financial turmoil and sovereign debt crisis, the European Union has introduced a new bail-in resolution mechanism based on the shared burden of losses between shareholders, debt-holders, and depositors. By focusing on the abnormal stock price reactions to bail-in policy announcements, this paper shows that investors perceive the new bail-in regime as a credible tool to decrease government interventions, reduce the too-big-to-fail problem, and increase market discipline in the European banking industry.

Keywords: Bail-in; Banking crises; Event study (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176519304069
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519304069

DOI: 10.1016/j.econlet.2019.108801

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

 
Page updated 2021-03-28
Handle: RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519304069