“Whatever it takes”: An Empirical Assessment of the Value of Policy Actions in Banking | Zendy

Franco Fiordelisi | Zendy; Ornella Ricci | Zendy

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“Whatever it takes”: An Empirical Assessment of the Value of Policy Actions in Banking

Author(s) -

Franco Fiordelisi,

Ornella Ricci

Publication year - 2015

Publication title -

review of finance

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.933

H-Index - 61

eISSN - 1875-824X

pISSN - 1572-3097

DOI - 10.1093/rof/rfv053

Subject(s) - monetary policy , credit default swap , robustness (evolution) , monetary economics , psychological intervention , financial crisis , swap (finance) , business , economics , stock (firearms) , financial system , financial market , finance , credit risk , macroeconomics , mechanical engineering , psychology , biochemistry , chemistry , psychiatry , gene , engineering

What types of policy intervention had a greater impact during the financial crisis? By using a detailed dataset of worldwide policy, we answer this question focusing on Globally-Systemically Important banks (G-SIBs), looking both to stock returns and Credit Default Swap (CDS) spreads reactions. As robustness checks, we also analyze a control sample of 31 large Non-Financial Companies (NFCs). Overall, we show that different policy interventions from governments and central banks have produced diverse market reactions: investors generally appreciate monetary policy interventions for G-SIBs (but not for NFCs) and do not welcome bank failures and bailouts (for both G-SIBs and NCFs).

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