Citation

Discussion Paper Details

Please find the details for DP9502 in an easy to copy and paste format below:

Full Details

Title: Financial Sector Reform After the Crisis: Has Anything Happened?

Author(s): Alexander Sch�fer, Isabel Schnabel and Beatrice Weder di Mauro

Publication Date: June 2013

Keyword(s): Dodd-Frank Act, event study, Financial sector reform, financial stability, German restructuring law, Swiss too-big-to-fail regulation, Vickers reform and Volcker rule

Programme Area(s): Financial Economics and International Macroeconomics

Abstract: We analyze the reactions of stock returns and CDS spreads of banks from Europe and the United States to four major regulatory reforms in the aftermath of the subprime crisis, employing an event study analysis. In contrast to the public perception that nothing has happened, we find that financial markets indeed reacted to the structural reforms enacted at the national level. All reforms succeeded in reducing bail-out expectations, especially for systemic banks. However, banks' profitability was also affected, showing up in lower equity returns. The strongest effects were found for the Dodd-Frank Act (especially the Volcker rule), whereas market reactions to the German restructuring law were small.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9502

Bibliographic Reference

Sch�fer, A, Schnabel, I and Weder di Mauro, B. 2013. 'Financial Sector Reform After the Crisis: Has Anything Happened?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9502