Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184711
Authors: 
Dinger, Valeriya
Marincas, Vlad
Vallascas, Francesco
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 111
Abstract: 
We evaluate the abnormal returns of issuing and non-issuing banks around the announcement of Seasoned Equity Offerings (SEOs) and explore how the market reaction is influenced by aggregate systemic conditions and by the systemic risk contribution and exposure of banks. While we find evidence of negative abnormal returns for issuers, non-issuing banks benefit from positive abnormal returns around the SEO announcement. We show that these positive returns are not entirely explained by the competition channel, which has been well documented for non-financial firms. In contrast, we demonstrate that they also depend on a so far undocumented system-stabilizing channel. Furthermore, under certain circumstances, the system-stabilizing channel contributes to mitigating the negative reaction to SEO announcements for the issuing banks.
Subjects: 
SEOs
Banking Regulation
Banking Crises
Contagion
Systemic Risk
JEL: 
G21
G28
G32
Document Type: 
Working Paper

Files in This Item:
File
Size
474.69 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.