Financial Sector Reform after the Subprime Crisis: Has Anything Happened? *

Schäfer, Alexander; Schnabel, Isabel; Mauro, Beatrice Weder di

doi:10.1093/rof/rfu055

Cited by 61 publications

(54 citation statements)

References 25 publications

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“…More recently, this methodology has been applied to assess the impacts of policy and regulatory actions associated with the GFC. For example, Schäfer et al (2015) look at the effects of press announcements of major country-level banking regulations post-GFC on stock returns in Germany, Switzerland, the U.K. and the U.S. They find that the largest implications for returns stem from the Dodd-Frank reform enacted in the U.S. and in particular from the Volcker rule.…”

Section: Introductionmentioning

confidence: 99%

“…We follow the methodologies in O'Hara and Shaw (1990) and Schäfer et al (2015) to identify events by looking at major newspapers. In particular, we follow a three-step approach.…”

Section: Introductionmentioning

confidence: 99%

“…We use a common way of identifying events by using the editor process of news agencies such as the Wall Street Journal and Financial Times. This approach has been used in previous studies such as O'Hara and Shaw (1990) and Schäfer et al (2015).…”

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confidence: 99%

“…For Basel III, we select all articles containing the word 'Basel III' which feature on the front page. A similar selection process has been applied by Schäfer et al (2015). The reason is that Basel III is the major international financial market reform in recent years and information representing real news should appear as a headline of a major international financial newspaper.…”

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confidence: 99%

“…For this purpose, we choose an event window of 3 days instead of just 1 day allowing for market anticipation and delayed reaction. Schäfer et al (2015) also choose an event window of 3 days -1 day before the announcement, the day of the announcement when the article is published and 1 day after the announcement.…”

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confidence: 99%

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Is Financial Regulation Good or Bad for Real Estate Companies? – An Event Study

Hoesli

Milcheva

Moss

2017

J Real Estate Finan Econ

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This study investigates how three regulatory reforms undertaken in the aftermath of the global financial crisis have affected returns of real estate companies. The three reforms are aimed at regulating different segments of the market -Basel III targets banks, and could restrict the availability of bank debt to the sector; the Alternative Investment Fund Management Directive (AIFMD) targets funds, which could increase compliance costs and reduce the potential investor pool; the European Market Infrastructure Regulation (EMIR) is aimed at derivative trading and could impact the cost of debt capital. We employ an event study methodology using daily stock returns of real estate companies and identify the regulatory events through news published in major international financial newspapers and news agencies. Our results show different responses across the three regulations. For Basel III we find support for the regulatory burden hypothesis of the bank lending channel for small real estate firms and firms with low debt-to-equity ratios as they cannot diversify their funding sources.The direct regulatory effect as tested using AIFMD announcements supports the profitbased reaction hypothesis for large firms. We also show that the news have asymmetric effects with tighter regulation news more frequently leading to significant responses in average abnormal returns (AARs) than loosening regulation news.

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Section: Introductionmentioning

confidence: 99%

“…We follow the methodologies in O'Hara and Shaw (1990) and Schäfer et al (2015) to identify events by looking at major newspapers. In particular, we follow a three-step approach.…”

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Is Financial Regulation Good or Bad for Real Estate Companies? – An Event Study

Hoesli

Milcheva

Moss

2017

J Real Estate Finan Econ

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Market reaction to supranational banking supervision in Europe: Do firm- and country-specific factors matter?

Olalla

Luna

2020

Empirica

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This paper investigates the financial market´s perception regarding the effectiveness of the Single Supervisory Mechanism in Europe. Do investors believe that centralized supervision adds value compared to multiple supervision? Do they feel uncertain about the supervisory role of the ECB? To answer these questions, a sample of 118 European Banks has been used finding that whereas in early dates the market reaction was positive reflecting the expectation of greater stability, it turned negative at the time the scope of the supervision was limited to only a group of banks. As might be expected, the reaction is significantly more negative for the directly supervised entities, anticipating a different and more demanding style of supervision that could lead to higher cost. This negative wealth effect is intensified for banks with higher price-to-book ratios or those located in countries with more developed financial systems and better investor protection. However, solvency and productivity firm indicators or low levels of perceived corruption moderate it. This research not only highlights the doubts and uncertainty of investors about the final applications of the SSM, but it could be also useful for policy makers and regulators in order to achieve a more harmonized supervision that improves the credibility of the systems and promote financial stability.

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What do we know about the stock markets’ reaction to regulatory announcements regarding financial institutions? Evidence from UK financial institutions

Kawas

Dockery²

2022

Rev Quant Finan Acc

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Financial Sector Reform after the Subprime Crisis: Has Anything Happened? *

Cited by 61 publications

References 25 publications

Is Financial Regulation Good or Bad for Real Estate Companies? – An Event Study

Is Financial Regulation Good or Bad for Real Estate Companies? – An Event Study

Market reaction to supranational banking supervision in Europe: Do firm- and country-specific factors matter?

What do we know about the stock markets’ reaction to regulatory announcements regarding financial institutions? Evidence from UK financial institutions

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