Did Silicon Valley Bank (SVB) fallout spillover to the euro area banking sector? We find that euro area banks’ cumulative abnormal returns declined by about 10% on average after the collapse of SVB. Surprisingly, we also find that investors did not react to euro area banks sharing similar vulnerabilities as SVB, such as lower liquidity and less stable funding sources. Instead, they were more concerned about the possible negative repercussions on banks’ balance sheets coming from the pace of the current monetary policy tightening.

Perdichizzi, S., Reghezza, A. (2023). Non-significant in life but significant in death: Spillover effects to euro area banks from the SVB fallout. ECONOMICS LETTERS, 230(September 2023) [10.1016/j.econlet.2023.111231].

Non-significant in life but significant in death: Spillover effects to euro area banks from the SVB fallout

Perdichizzi S.;
2023

Abstract

Did Silicon Valley Bank (SVB) fallout spillover to the euro area banking sector? We find that euro area banks’ cumulative abnormal returns declined by about 10% on average after the collapse of SVB. Surprisingly, we also find that investors did not react to euro area banks sharing similar vulnerabilities as SVB, such as lower liquidity and less stable funding sources. Instead, they were more concerned about the possible negative repercussions on banks’ balance sheets coming from the pace of the current monetary policy tightening.
Articolo in rivista - Articolo scientifico
Euro area banks; Event study; Silicon valley bank; Spillover;
English
21-giu-2023
2023
230
September 2023
111231
none
Perdichizzi, S., Reghezza, A. (2023). Non-significant in life but significant in death: Spillover effects to euro area banks from the SVB fallout. ECONOMICS LETTERS, 230(September 2023) [10.1016/j.econlet.2023.111231].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/515479
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