Repercussions of the Silicon Valley Bank collapse on global stock markets

Pandey, Dharen Kumar; Hassan, M. Kabir; Kumari, Vineeta; Hasan, Rashedul

doi:10.1016/j.frl.2023.104013

Cited by 41 publications

(17 citation statements)

References 36 publications

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“…The study also showed that there was little contagion outside of the banking industry. Similarly, Pandey et al . (2023b), using an event study methodology, examined how the bankruptcy of Silicon Valley Bank affected international stock markets.…”

Section: Background Of the Studymentioning

confidence: 68%

“…Furthermore, the study's results differ from those of Yadav et al (2023), which suggested that the collapse of a big financial institution like Silicon Valley Bank might have a significant impact on international stock markets. Pandey et al (2023b), investigating the impact of the collapse of the Silicon Valley Bank on global equity markets, found a significant negative impact of the event on stock markets worldwide.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

“…Recent studies directly relevant to our research have shed light on the impact of the collapse of prominent banks on stock markets worldwide. In particular, Akhtaruzzaman et al (2023) and Pandey et al (2023b) provide valuable insights into the effects of the recent collapse of Silicon Valley Bank on different stock markets, offering relevant findings to inform our current investigation. Akhtaruzzaman et al (2023) investigated the impact of Silicon Valley Bank's failure on financial contagion in selected emerging economies and G7 countries and revealed significant contagion within international banks but only modest contagion in other sectors.…”

Section: The Impact Ofmentioning

confidence: 95%

“…The study also showed that there was little contagion outside of the banking industry. Similarly, Pandey et al (2023b), using an event study methodology, examined how the bankruptcy of Silicon Valley Bank affected international stock markets. Due to greater interconnectedness and interdependence, the repercussions of the collapse were more pronounced in developed markets while having a varied impact in countries with robust banking systems.…”

Section: The Impact Ofmentioning

confidence: 99%

“…In particular, Akhtaruzzaman et al. (2023) and Pandey et al . (2023b) provide valuable insights into the effects of the recent collapse of Silicon Valley Bank on different stock markets, offering relevant findings to inform our current investigation.…”

Section: Background Of the Studymentioning

confidence: 99%

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The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

Goyal,

Soni

2023

JES

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PurposeThe present study aims to comprehensively examine the impact of the Union Bank of Switzerland (UBS) takeover of Credit Suisse on the banking and financial services sector in the Indian stock market. To fully comprehend the impact of the event, the study separately investigates the response of private sector banks, public sector banks, overall banking companies and financial services companies to the takeover of the second-largest financial institution in Switzerland.Design/methodology/approachThe study employs event study methodology, using the market model, to analyze the event's impact on Indian banking and financial services sector stocks. The data consists of daily closing prices of companies included in the Nifty Private Bank Index, Nifty PSU Bank Index, Nifty Bank Index and Nifty Financial Services Index from the National Stock Exchange (NSE). Furthermore, cross-sectional regression analysis has been conducted to explore the factors that drive abnormal returns.FindingsThe empirical findings of the study suggest the event had a heterogeneous impact on the stock prices of Indian banks and financial services companies. While public sector banks experienced a significant negative impact on select days within the event window, the overall Indian banking sector and financial services companies also witnessed notable declines. In contrast, Indian private sector banks were relatively resilient, exhibiting minimal effects. However, the cumulative effect is found to be insignificant for all four categories across different event windows. The study also observed that the cumulative abnormal returns (CARs) were significantly influenced by certain variables during different event windows.Originality/valueTo the best of the authors' knowledge, the present study is the earliest attempt that investigates the impact of the UBS takeover of Credit Suisse on the Indian banking and financial services sector using event study methodology and cross-sectional regression model.

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Section: Background Of the Studymentioning

confidence: 68%

Section: Empirical Results and Discussionmentioning

confidence: 99%

Section: The Impact Ofmentioning

confidence: 95%

Section: The Impact Ofmentioning

confidence: 99%

Section: Background Of the Studymentioning

confidence: 99%

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The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

Goyal,

Soni

2023

JES

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Predicting bank inactivity: A comparative analysis of machine learning techniques for imbalanced data

Mrad,

Lahiani,

Mefteh-Wali

et al. 2024

Ann Oper Res

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Social media-based implosion of Silicon Valley Bank and its domino effect on bank stock indices: evidence from advanced machine and deep learning algorithms

Khan,

Hasan,

Anupam

2024

Soc. Netw. Anal. Min.

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Social media-driven speculations play a crucial role in triggering the collapse of the banking system and stock markets. In this paper, we investigate the effect of Twitter-based investor sentiment on the collapse of Silicon Valley Bank (SVB), the 16th largest bank in the US. Additionally, we examine the spillover effect of the social media-based investor sentiment and SVB collapse on the bank stock indices from twelve countries where Global Systemically Important Banks (G-SIBs) operate. Advanced machine and deep learning models are employed to model the social media-based investors’ sentiment regarding SVB implosion and its spillover effect on the G-SIBs’ bank stock indices. Our results reveal that social media-based negative investors’ sentiment played an important role in SVB implosion. Our results further show that the negative investors’ sentiment persisted, and its systemic shock was transmitted to the G-SIBs bank stock indices. Importantly, our results provide a lead and lag relationship between investors’ sentiment and returns of G-SIBs bank stock indices. The findings of this study offer crucial insights for policymakers to consider the external shocks associated with social media-based investors’ sentiment when devising policies related to bank runs, thus helping to prevent future financial crises and cross-border contagion.

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Repercussions of the Silicon Valley Bank collapse on global stock markets

Cited by 41 publications

References 36 publications

The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

Predicting bank inactivity: A comparative analysis of machine learning techniques for imbalanced data

Social media-based implosion of Silicon Valley Bank and its domino effect on bank stock indices: evidence from advanced machine and deep learning algorithms

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