Equity Returns in the Banking Sector in the Wake of the Great Recession and the European Sovereign Debt Crisis

22 Pages Posted: 7 Jul 2012 Last revised: 16 Jul 2012

See all articles by Jorge A. Chan-Lau

Jorge A. Chan-Lau

International Monetary Fund (IMF) - International Capital Markets Department; National University of Singapore (NUS) - Risk Management Institute; Tufts University - Fletcher School of Law and Diplomacy

Estelle Liu

International Monetary Fund

Jochen Schmittmann

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2012

Abstract

This study finds that equity returns in the banking sector in the wake of the Great Recession and the European sovereign debt crisis have been driven mainly by weak growth prospects and heightened sovereign risk and to a lesser extent, by deteriorating funding conditions and investor sentiment. While the equity return performance in the banking sector has been dismal in general, better capitalized and less leveraged banks have outperformed their peers, a finding that supports policymakers’ efforts to strengthen bank capitalization.

Keywords: Banks, equity returns, financial crisis, sovereign risk, sovereign debt crisis, economic growth, regulatory capital

JEL Classification: G01, G14, G21

Suggested Citation

Chan-Lau, Jorge Antonio and Liu, Estelle and Schmittmann, Jochen, Equity Returns in the Banking Sector in the Wake of the Great Recession and the European Sovereign Debt Crisis (July 1, 2012). Available at SSRN: https://ssrn.com/abstract=2101635 or http://dx.doi.org/10.2139/ssrn.2101635

Jorge Antonio Chan-Lau

International Monetary Fund (IMF) - International Capital Markets Department ( email )

700 19th Street NW
Washington, DC 20431
United States

National University of Singapore (NUS) - Risk Management Institute ( email )

21 Heng Mui Keng Terrace
Level 4
Singapore, 119613
Singapore

Tufts University - Fletcher School of Law and Diplomacy ( email )

160 Packard Ave
Medford, MA 02155
United States

HOME PAGE: http://fletcher.tufts.edu/ceme/index.shtml

Estelle Liu

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jochen Schmittmann (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
65
Abstract Views
696
rank
316,065
PlumX Metrics