IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v67y2024ipbs1544612324009607.html
   My bibliography  Save this article

Herd behavior in U.S. bank stocks

Author

Listed:
  • Kirimhan, Destan
  • Payne, James E.
  • AlKhazali, Osamah

Abstract

This study investigates investor herd biases in U.S. banks' stock returns before, after, and during the COVID-19 pandemic by focusing on the differential impacts of monetary policy cycles and bank regulatory framework. Our results display fundamental herding for both large stress-tested banks and non-stress-tested regional banks during the pre-pandemic tightening monetary policy period in which bank fundamentals were improved through regulatory changes after the global financial crisis. However, we find evidence of nonfundamental herding during the post-pandemic tightening monetary policy period in which bank fundamentals were weakened. This situation might have contributed to the value irrelevance of bank fundamental information to stock prices. Our results have important implications for regulators, policymakers, and investors.

Suggested Citation

  • Kirimhan, Destan & Payne, James E. & AlKhazali, Osamah, 2024. "Herd behavior in U.S. bank stocks," Finance Research Letters, Elsevier, vol. 67(PB).
  • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009607
    DOI: 10.1016/j.frl.2024.105930
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324009607
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.frl.2024.105930?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009607. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.