Does regulating remuneration affect the market value of European Union banks? Large versus small/medium sized banks

Belén Díaz Díaz, Rebeca García‐Ramos and Myriam García Olalla

Regulation & Governance, 2020, vol. 14, issue 1, 150-164

Abstract: The aim of this paper was to analyze equity market reactions to the mandatory European Union regulation of remuneration policies in financial institutions. Using event study methodology, we investigated market reactions to the first European Directive on compensation policies after the financial crisis using a sample of 124 banks operating in the European Union. We divided the sample into two groups according to bank size considering four criteria: the US Dodd‐Frank Act 2010, the Liikanen Report 2012, Global Systemically Important Banks 2011, and the European Central Bank 2014. We found strong evidence of an average negative market reaction to compensation regulation. Moreover, this negative reaction is stronger for large banks than for small/medium sized banks.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/rego.12175

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:reggov:v:14:y:2020:i:1:p:150-164

Access Statistics for this article

More articles in Regulation & Governance from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().