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Stock market effects of silicon valley bank and credit suisse failure: evidence for a sample of european listed banks

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  • Martins, António Miguel

Abstract

This paper examines the short-term market reaction of Silicon Valley Bank and Credit Suisse failure in the European banking industry. Using an event study, I show that stocks react significantly negatively to those two bank failure events. The general drop in value seen in the sector is explained by systemic contagion, panic and information asymmetries and uncertainty returns. These reactions are reinforced or mitigated by bank-specific characteristics such as liquidity, interest margin, risk aversion, operational efficiency, and institutional ownership.

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  • Martins, António Miguel, 2023. "Stock market effects of silicon valley bank and credit suisse failure: evidence for a sample of european listed banks," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006682
    DOI: 10.1016/j.frl.2023.104296
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    Cited by:

    1. Liu, Xia & Megginson, William & Tran, Nhu & Wei, Siqi, 2024. "Who Loses Most When Big Banks Suddenly Fail? Evidence from Silicon Valley Bank Collapse," Finance Research Letters, Elsevier, vol. 59(C).
    2. Aharon, David Y. & Ali, Shoaib, 2024. "A high-frequency data dive into SVB collapse," Finance Research Letters, Elsevier, vol. 59(C).

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