Over the past decade, one popular way for Turkish banks to remove nonperforming loans (NPLs) from their balance sheets has been to sell them to asset management companies. We examine the short-term market reaction to the announcements of such NPL sales over the period 2009-2019. We also consider...

In this study, we use bank loan information to construct proxies for corporate transparency and examine whether these measures reflect information asymmetry in the stock market. Our analysis is based on a novel dataset of stock transactions and bank loans of all publicly listed firms on the...

We study the impact of ECB's supervisory announcements on the Bank Stock index, from 2013 through 2017. Our evidence shows that the news, related to supervisory actions, do have highly significant effects on the market price of banks, contributing to the volatility of the Bank Stock Index for...

This paper offers evidence that bank managers adjust key strategic variables following a risk and/or valuation signal. Banks receive a risk signal when they have a substantially higher volatility compared to the best performing bank(s) with similar business model characteristics, and a valuation...

During the subprime crisis, the FDIC has shown, once again, laxity in resolving and closing insolvent institutions. Ronn and Verma (1986) call the tolerance level below which a bank closure is triggered the regulatory policy parameter. We derive a model in which we make this parameter stochastic...

Gandhi and Lustig (2013) find that large banks in the U.S. have significantly lower risk-adjusted returns than small- and medium-sized bank stocks. I am to unable to replicate this finding despite many different empirical choices in my specification. The results suggest that implicit government...

In this paper we provide empirical evidence of abnormal returns associated with credit rating changes for a sample of 264 credit ratings announcements by 43 international and US banks between 2000 and 2012. The banks in the sample have either a primary or secondary US listing. We provide...

Mergers and acquisitions (M&As) are mainly a mechanism used in the Latin American banking industry to carry out business consolidation. This paper focuses on the effect of M&A announcements on stocks of Latin American banks and their rivals between 2000 and 2019. We evaluate two impacts of M&A...

We investigate bank stock and option transmissions during the financial crisis in 2008. Contemporaneous and lagged-one stock order imbalances have a significant impact on option returns. A time-varying GARCH model is employed to confirm the results. We develop an imbalance-based call (put)...

The relationship between leverage and returns on US bank stocks between 1973 and 2019 is slightly hump-shaped, almost flat. This observed relationship cannot be explained by standard risk factors such as correlation with the market return, book-to-market, size, momentum and term structure of...