Bank stocks and Roosevelt’s bank holiday

Marc Weidenmier, Angela Vossmeyer, Nathan Stella and Oncel Aldanmaz

Economics Letters, 2025, vol. 255, issue C

Abstract: Roosevelt’s Bank Holiday in March 1933 aimed to halt bank runs and implement licensing for banks. Using a new hand-collected daily database, we examine how bank stocks and bond markets responded to this sweeping regulation. We find that New York City banks saw significant negative abnormal returns, while Chicago banks experienced positive returns, highlighting regional differences in perceptions of the policy. Corporate bond yields fell by 1.4 percentage points, lowering interest rates. Our findings show how markets reacted differently across regions and asset classes to this critical intervention.

Keywords: Bank regulation; Credit markets; Stock prices; Event study (search for similar items in EconPapers)
JEL-codes: G01 G28 N22 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003763

DOI: 10.1016/j.econlet.2025.112539

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