"Whatever it takes": An Empirical Assessment of the Value of Policy Actions in Banking. (17th December 2015)

• Record Type: Journal Article
• Authors: Fiordelisi, Franco; Ricci, Ornella
• Is Part Of: Review of finance. Volume 20:Number 6(2016)
• Page Start: 2321
• Page End: 2347
• Publication Date: 2015-12-17
• Subjects: Finance -- Europe -- Periodicals; Financiën; Finance; Periodicals; 332.09405
• DOI: 10.1093/rof/rfv053
• Languages: English
• ISSNs: 1572-3097

Abstract

Abstract : What types of policy intervention had a greater impact during the financial crisis? By using a detailed dataset of worldwide policy, we answer this question focusing on Global Systemically Important banks (G-SIBs), looking both to stock returns and Credit Default Swap (CDS) spreads reactions. As robustness checks, we also analyze a control sample of 31 large Non-Financial Companies (NFCs). Overall, we show that different policy interventions from governments and central banks have produced diverse market reactions: investors generally appreciate monetary policy interventions for G-SIBs (but not for NFCs) and do not welcome bank failures and bailouts (for both G-SIBs and NCFs).