Non-significant in life but significant in death: Spillover effects to euro area banks from the SVB fallout

Salvatore Perdichizzi and Alessio Reghezza ()

Economics Letters, 2023, vol. 230, issue C

Abstract: Did Silicon Valley Bank (SVB) fallout spillover to the euro area banking sector? We find that euro area banks’ cumulative abnormal returns declined by about 10% on average after the collapse of SVB. Surprisingly, we also find that investors did not react to euro area banks sharing similar vulnerabilities as SVB, such as lower liquidity and less stable funding sources. Instead, they were more concerned about the possible negative repercussions on banks’ balance sheets coming from the pace of the current monetary policy tightening.

Keywords: Event study; Silicon valley bank; Spillover; Euro area banks (search for similar items in EconPapers)
JEL-codes: G01 G14 G21 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002562

DOI: 10.1016/j.econlet.2023.111231

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