Government interventions and equity liquidity in the sub-prime crisis period: Evidence from the ETF market

Junmao Chiu and Kunchi Tsai

International Review of Economics & Finance, 2017, vol. 47, issue C, 128-142

Abstract: Using bank bailout and funding injection actions to measure government interventions, this study explores whether the announcements of these actions could improve equity liquidity in the subprime crisis period. Our empirical results show that funding injections and bailout actions can both improve equity liquidity and increase net buying pressure, especially for the Paulson plan and the rescue of AIG from bankruptcy. The funding injection actions can improve equity liquidity more significantly than bailout actions.

Keywords: Bailout; Funding injection; Sub-prime crisis; Equity liquidity; Funding constraints (search for similar items in EconPapers)
JEL-codes: G00 G01 G12 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:47:y:2017:i:c:p:128-142

DOI: 10.1016/j.iref.2016.10.013

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