TY - JOUR

T1 - Bank stock performance and bank regulation around the globe

AU - Pelster, Matthias

AU - Irresberger, Felix

AU - Weiß, Gregor

PY - 2018/1/22

Y1 - 2018/1/22

N2 - We analyze the effect of bank capital, regulation, and supervision on the annual stock performance of global banks during the period of 1999–2012. We study a large comprehensive panel of international banks and find that higher Tier 1 capital decreases a bank's stock performance over the whole sample period. However, during turbulent times stocks of more highly capitalized banks perform significantly better. Additionally, we find strong evidence that banks that are more likely to receive government bailout during financial distress realize smaller stock performance. In contrast, we find no convincing evidence that banks that generate higher non-interest income have a higher performance.

AB - We analyze the effect of bank capital, regulation, and supervision on the annual stock performance of global banks during the period of 1999–2012. We study a large comprehensive panel of international banks and find that higher Tier 1 capital decreases a bank's stock performance over the whole sample period. However, during turbulent times stocks of more highly capitalized banks perform significantly better. Additionally, we find strong evidence that banks that are more likely to receive government bailout during financial distress realize smaller stock performance. In contrast, we find no convincing evidence that banks that generate higher non-interest income have a higher performance.

KW - Sustainability sciences, Management & Economics

KW - bank stock performance

KW - bank regulation

KW - capital

KW - implicit bailout guarantee

UR - http://www.scopus.com/inward/record.url?scp=84987660320&partnerID=8YFLogxK

U2 - 10.1080/1351847X.2016.1226189

DO - 10.1080/1351847X.2016.1226189

M3 - Journal articles

VL - 24

SP - 77

EP - 113

JO - European Journal of Finance

JF - European Journal of Finance

SN - 1351-847X

IS - 2

ER -