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

Li, H., Liu, H., Siganos, A. and Zhou, M. (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. (doi:10.1016/j.jfs.2016.06.007)

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Abstract

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 2007-09 financial crisis period and increased after the passage of the Dodd-Frank Act in 2010.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Siganos, Dr Antonios and Liu, Dr Hong and Li, Miss Hui
Authors: Li, H., Liu, H., Siganos, A., and Zhou, M.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Financial Stability
Publisher:Elsevier
ISSN:1572-3089
ISSN (Online):1878-0962
Published Online:23 June 2016
Copyright Holders:Copyright © 2016 Elsevier
First Published:First published in Journal of Financial Stability 25:37-46
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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