We investigate whether financial markets reacted to the regulatory changes implied by the publication of the list of systemically important financial institutions (SIFI) and the new rules designed to address the too-big-to-fail problem of systemic banks. By applying event study methodology to a sample of 70 of the world's largest banks, we assess whether the stock prices of SIFIs reacted significantly and differently from those of other large banks not deemed to be systemically important following the release of information regarding the methodology used to identify SIFIs and their new capital requirements; the disclosure of the first list of 29 SIFIs; and the publication of the updated list of 28 SIFIs. Overall, we determine that financial markets did not univocally react to the new regulation regarding SIFIs. However markets discriminated between high and low capitalized banks and they correctly estimated the probable effects of the additional capital requirements.

Bongini, P., Nieri, L., Pelagatti, M. (2015). The Importance of Being Systemically Important Financial Institutions. JOURNAL OF BANKING & FINANCE, 50, 562-574 [10.1016/j.jbankfin.2014.07.006].

The Importance of Being Systemically Important Financial Institutions

BONGINI, PAOLA AGNESE
;
PELAGATTI, MATTEO MARIA
2015

Abstract

We investigate whether financial markets reacted to the regulatory changes implied by the publication of the list of systemically important financial institutions (SIFI) and the new rules designed to address the too-big-to-fail problem of systemic banks. By applying event study methodology to a sample of 70 of the world's largest banks, we assess whether the stock prices of SIFIs reacted significantly and differently from those of other large banks not deemed to be systemically important following the release of information regarding the methodology used to identify SIFIs and their new capital requirements; the disclosure of the first list of 29 SIFIs; and the publication of the updated list of 28 SIFIs. Overall, we determine that financial markets did not univocally react to the new regulation regarding SIFIs. However markets discriminated between high and low capitalized banks and they correctly estimated the probable effects of the additional capital requirements.
Articolo in rivista - Articolo scientifico
Systemic risk; Financial institutions; Event study; Regulatory reforms; Capital adequacy
English
2015
50
562
574
none
Bongini, P., Nieri, L., Pelagatti, M. (2015). The Importance of Being Systemically Important Financial Institutions. JOURNAL OF BANKING & FINANCE, 50, 562-574 [10.1016/j.jbankfin.2014.07.006].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/52426
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