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The impact of expected regulatory changes: The case of banks following the 2016 U.S. election

Hachenberg, B. ; Kiesel, F. ; Kolaric, S. ; Schiereck, D. :
The impact of expected regulatory changes: The case of banks following the 2016 U.S. election.
[Online-Edition: http://dx.doi.org/10.1016/j.frl.2016.12.021]
In: Finance Research Letters, 22 pp. 268-273. ISSN 1544-6123
[Artikel], (2017)

Offizielle URL: http://dx.doi.org/10.1016/j.frl.2016.12.021

Kurzbeschreibung (Abstract)

We analyze bank stocks and credit default swap (CDS) spreads around the U.S. presidential election on November 8, 2016. We find a strong rally in bank stocks combined with an overall widening in bank CDS spreads during the days after the announcement of the election result. Following Donald Trump's victory, market participants appear to anticipate a lowering of financial sector regulation, particularly with respect to the Dodd-Frank act. In addition, we find that Global Systemically Important Banks (G-SIBs) reacted more positive than non-G-SIBs, with stocks having larger gains and CDS remaining relatively stable. Non-G-SIB stocks, on the other hand, gained less and their CDS widened, indicating less favorable changes from deregulation than for G-SIBs.

Typ des Eintrags: Artikel
Erschienen: 2017
Autor(en): Hachenberg, B. ; Kiesel, F. ; Kolaric, S. ; Schiereck, D.
Titel: The impact of expected regulatory changes: The case of banks following the 2016 U.S. election
Sprache: Englisch
Kurzbeschreibung (Abstract):

We analyze bank stocks and credit default swap (CDS) spreads around the U.S. presidential election on November 8, 2016. We find a strong rally in bank stocks combined with an overall widening in bank CDS spreads during the days after the announcement of the election result. Following Donald Trump's victory, market participants appear to anticipate a lowering of financial sector regulation, particularly with respect to the Dodd-Frank act. In addition, we find that Global Systemically Important Banks (G-SIBs) reacted more positive than non-G-SIBs, with stocks having larger gains and CDS remaining relatively stable. Non-G-SIB stocks, on the other hand, gained less and their CDS widened, indicating less favorable changes from deregulation than for G-SIBs.

Titel der Zeitschrift, Zeitung oder Schriftenreihe: Finance Research Letters
Band: 22
Fachbereich(e)/-gebiet(e): 01 Fachbereich Rechts- und Wirtschaftswissenschaften > Betriebswirtschaftliche Fachgebiete
01 Fachbereich Rechts- und Wirtschaftswissenschaften > Betriebswirtschaftliche Fachgebiete > Fachgebiet Unternehmensfinanzierung
01 Fachbereich Rechts- und Wirtschaftswissenschaften
Hinterlegungsdatum: 03 Jan 2017 09:31
Offizielle URL: http://dx.doi.org/10.1016/j.frl.2016.12.021
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