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Bank regulation, financial crisis and the announcement effects of seasoned equity offerings of US commercial banks

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journal contribution
posted on 21.07.2016, 15:21 authored by Hui Li, Hong Liu, Antonios Siganos, Mingming Zhou
This paper studies the differences in the announcement effects of seasoned equity offerings (SEOs) of commercial banks and non-banks, and explores the influence of bank regulation and the financial crisis on such differences. We find that abnormal stock returns on SEO announcements for US commercial banks are significantly higher than those of non-banks, consistent with the hypothesis that bank regulations reduce the likelihood that bank SEOs signal overpriced equity. The propensity score matching-based difference-in-difference analysis indicates that the differences in stock returns between banks and non-banks decreased during the 2007–2009 financial crisis period and increased after the passage of the Dodd-Frank Act in 2010.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Financial Stability

Volume

25

Pages

37 - 46 (9)

Citation

LI, H. ... et al, 2016. Bank regulation, financial crisis and the announcement effects of seasoned equity offerings of US commercial banks. Journal of Financial Stability, 25, pp. 37 - 46.

Publisher

© Elsevier

Version

NA (Not Applicable or Unknown)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Acceptance date

16/06/2016

Publication date

2016

Notes

This paper was accepted for publication in the journal Journal of Financial Stability and the definitive published version is available at http://dx.doi.org/10.1016/j.jfs.2016.06.007

ISSN

1572-3089

Language

en