Financial Sector Reform after the Crisis: Has Anything Happened?

48 Pages Posted: 12 Jun 2013

See all articles by Alexander Schäfer

Alexander Schäfer

Johannes Gutenberg University Mainz - Faculty of Law and Economics

Isabel Schnabel

University of Bonn - Institute for Financial Economics and Statistics; Max Planck Institute for Research on Collective Goods

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID

Multiple version iconThere are 2 versions of this paper

Date Written: June 2013

Abstract

We analyze the reactions of stock returns and CDS spreads of banks from Europe and the United States to four major regulatory reforms in the aftermath of the subprime crisis, employing an event study analysis. In contrast to the public perception that nothing has happened, we find that financial markets indeed reacted to the structural reforms enacted at the national level. All reforms succeeded in reducing bail-out expectations, especially for systemic banks. However, banks' profitability was also affected, showing up in lower equity returns. The strongest effects were found for the Dodd-Frank Act (especially the Volcker rule), whereas market reactions to the German restructuring law were small.

Keywords: Dodd-Frank Act, event study, Financial sector reform, financial stability, German restructuring law, Swiss too-big-to-fail regulation, Vickers reform, Volcker rule

JEL Classification: G21, G28

Suggested Citation

Schäfer, Alexander and Schnabel, Isabel and Weder di Mauro, Beatrice, Financial Sector Reform after the Crisis: Has Anything Happened? (June 2013). CEPR Discussion Paper No. DP9502, Available at SSRN: https://ssrn.com/abstract=2278079

Alexander Schäfer (Contact Author)

Johannes Gutenberg University Mainz - Faculty of Law and Economics ( email )

Chair of Corporate Finance
D-55099 Mainz, 55128
Germany

Isabel Schnabel

University of Bonn - Institute for Financial Economics and Statistics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

HOME PAGE: http://www.finance.uni-bonn.de/schnabel

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+49-228-9141665 (Phone)
+49-228-9141621 (Fax)

HOME PAGE: http://www.coll.mpg.de/team/page/isabel_schnabel

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland
1211 (Fax)

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