Economic policy uncertainty and bank stability
| Autor: | Gamze Ozturk Danisman, Amine Tarazi |
|---|---|
| Přispěvatelé: | Faculty of Economics, Administrative and Social Sciences, Kadir Has University, Turkey, Laboratoire d'Analyse et de Prospective Economique (LAPE), Gouvernance des Institutions et des Organisations (GIO), Université de Limoges (UNILIM)-Université de Limoges (UNILIM) |
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
History
050208 finance Index (economics) Polymers and Plastics Coronavirus disease 2019 (COVID-19) Economic policy 05 social sciences Control (management) Stability (learning theory) Bank Stability COVID-19 JEL classification: G18 JEL: G - Financial Economics/G.G1 - General Financial Markets/G.G1.G18 - Government Policy and Regulation [SHS.ECO]Humanities and Social Sciences/Economics and Finance Industrial and Manufacturing Engineering G28 Economic Policy Uncertainty Bank risk 0502 economics and business Financial crisis Economics G21 050207 economics Business and International Management Implementation Bank Risk |
| Popis: | We examine the influence of economic policy uncertainty on bank stability post-2007-2008 global financial crisis. We rely on the economic policy uncertainty (EPU) index introduced by Baker et al. (2016). We use 176,477 quarterly observations for US commercial banks over the period from 2011Q1 to 2020Q3 and find consistent and robust evidence that bank stability decreases as the level of economic policy uncertainty increases. We specifically control for demand-side effects which indicates that the decrease in bank stability not only originates from borrowers' and customers' conditions but also from a change in bank behavior. A deeper investigation shows that the negative impact of policy uncertainty on bank stability is stronger for larger banks, and weaker for highly capitalized banks as well as for more liquid banks. Our findings have important implications particularly for the COVID-19 policy implementations. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|