 Energy shocks and bank performance in the advanced economiesAsma Nasim and Gareth Downing Energy Economics, 2023, vol. 118, issue C Abstract: This paper investigates the effects of energy price shocks on the performance of 62 major banks in the G7 advanced economies from 2001 to 2020. Employing numerous empirical techniques, including fixed effects, random effects, panel fully modified least squares, panel dynamic least squares, and GMM, the findings show that energy price shocks have a significant negative impact on banking sector performance, in terms of both return on assets and return on equity. This result holds true even after controlling for a range of key macro and financial variables, suggesting energy price shocks can have a direct impact on banking performance. Given the importance of banks for both financial stability and wider economic performance, and given the recent surge in energy prices, these findings have important implications for policymakers, regulators, as well as banking sector stakeholders. Keywords: Energy price shocks; Bank performance; Macroeconomic environment; Leverage; Capital adequacy; Monetary policy; Uncertainty; G7 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:118:y:2023:i:c:s0140988323000154 DOI: 10.1016/j.eneco.2023.106517 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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