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Bail-In Regulation and Stock Market Reaction

Fiordelisi, Franco and Minnucci, Federica and Previati, Daniele and Ricci, Ornella (2019) 'Bail-In Regulation and Stock Market Reaction.' Economics Letters. ISSN 0165-1765

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Abstract

In response to the global financial turmoil and sovereign debt crisis, the European Union has introduced a new bail-in resolution mechanism based on the shared burden of losses between shareholders, debt-holders, and depositors. By focusing on the abnormal stock price reactions to bail-in policy announcements, this paper shows that investors perceive the new bail-in regime as a credible tool to decrease government interventions, reduce the too-big-to-fail problem, and increase market discipline in the European banking industry.

Item Type: Article
Uncontrolled Keywords: Bail-in, Banking crises, Event study
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 05 Nov 2019 09:27
Last Modified: 05 Nov 2019 10:15
URI: http://repository.essex.ac.uk/id/eprint/25737

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