Journal article 597 views 83 downloads
Banking market reaction to auctions of failed banks
International Journal of Finance & Economics, Volume: 27, Issue: 1, Pages: 518 - 534
Swansea University Author:
Tim Zhou
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DOI (Published version): 10.1002/ijfe.2166
Abstract
In this study, we find that non-merger rival banks of failed banks from 2008 to 2013 experience substantial negative abnormal stock returns in the United States when failed banks are auctioned. Negative abnormal returns are related to contagion effects associated with an increased probability of the...
| Published in: | International Journal of Finance & Economics |
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| ISSN: | 1076-9307 1099-1158 |
| Published: |
Wiley
2022
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| Online Access: |
Check full text
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa54637 |
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| Abstract: |
In this study, we find that non-merger rival banks of failed banks from 2008 to 2013 experience substantial negative abnormal stock returns in the United States when failed banks are auctioned. Negative abnormal returns are related to contagion effects associated with an increased probability of their own failure and the information of these rival banks' opaque assets. We also find evidence that FDIC resolutions of these failed banks, similar to previous regulatory interventions, distort the market competition. |
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| Keywords: |
auction, banks, FDIC, resolution |
| College: |
Faculty of Humanities and Social Sciences |
| Issue: |
1 |
| Start Page: |
518 |
| End Page: |
534 |