 Market reaction to EU CRD IV regulation in the banking industrySara Longo, Michele Fabrizi and Antonio Parbonetti Research in International Business and Finance, 2025, vol. 73, issue PB Abstract: This paper aims to provide evidence on the market reaction to the EU CRD IV regulation announcements in the EU banking industry and examine their determinants at the bank and country levels. EU CRD IV came up in the aftermath of the 2008 financial crisis, and it is recognized as the most notable regulatory initiative at the European level to increase overall bank transparency. Employing an event study approach around 15 announcements between 2011 and 2013, we document a negative market reaction on a sample of 145 listed European banks, indicating that transparency increases are borne by shareholders, with detrimental impacts on bank stock prices. We show that investors negatively perceive the introduction of this regulation, with more pronounced reactions for poorly transparent, large, and complex banks located in countries with high exposure to sovereign indebtedness. Our findings contribute to the debate on bank transparency matters. Keywords: Market reaction; EU CRD IV regulation; Post-crisis; Transparency; EU listed banks (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:riibaf:v:73:y:2025:i:pb:s0275531924004458 DOI: 10.1016/j.ribaf.2024.102652 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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