Berninger, M. ; Kiesel, F. ; Schiereck, D.
:
When your regulator becomes your new neighbor: Bank regulation and the relocation of EBA and EMA.
In:
Economics Letters, 167
(6)
S. 108-111.
ISSN 0165-1765
[Artikel]
, (2018)
Kurzbeschreibung (Abstract)
Financial services providers belong to the most intensively regulated institutions at all, and to be compliant with regulation is a challenging and expensive task for each bank. Recent research indicates that a high geographic proximity to a regulatory supervisor might increase the monitoring intensity and therefore harm the shareholder wealth of monitored institutions. The announced relocation of the European Banking Authority (EBA) from London to Paris offers a natural experiment to test the effect of geographically close regulation on the market value of financial institutions. Our results show that the EBA relocation indeed induced negative abnormal stock returns for French banks. Additionally, we document that this is a bank specific effect. The parallel relocation decision of the European Medicines Agency (EMA) to Amsterdam does not result in abnormal returns of Dutch pharmaceutical corporations. Obviously, a relationship between distance and intensified monitoring exists for banks but not for pharmaceuticals.
| Typ des Eintrags: | Artikel |
|---|---|
| Erschienen: | 2018 |
| Autor(en): | Berninger, M. ; Kiesel, F. ; Schiereck, D. |
| Titel: | When your regulator becomes your new neighbor: Bank regulation and the relocation of EBA and EMA |
| Sprache: | Englisch |
| Kurzbeschreibung (Abstract): | Financial services providers belong to the most intensively regulated institutions at all, and to be compliant with regulation is a challenging and expensive task for each bank. Recent research indicates that a high geographic proximity to a regulatory supervisor might increase the monitoring intensity and therefore harm the shareholder wealth of monitored institutions. The announced relocation of the European Banking Authority (EBA) from London to Paris offers a natural experiment to test the effect of geographically close regulation on the market value of financial institutions. Our results show that the EBA relocation indeed induced negative abnormal stock returns for French banks. Additionally, we document that this is a bank specific effect. The parallel relocation decision of the European Medicines Agency (EMA) to Amsterdam does not result in abnormal returns of Dutch pharmaceutical corporations. Obviously, a relationship between distance and intensified monitoring exists for banks but not for pharmaceuticals. |
| Titel der Zeitschrift, Zeitung oder Schriftenreihe: | Economics Letters |
| Band: | 167 |
| (Heft-)Nummer: | 6 |
| Verlag: | Elsevier |
| 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: | 22 Mär 2018 09:38 |
| DOI: | 10.1016/j.econlet.2018.03.023 |
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