Regulation of Deposit-Taking Institutions: Price Effect at Disclosures of New Regulations
| Autor: | Nor Hayati Ahmad, Mohamed Ariff |
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| Jazyk: | angličtina |
| Rok vydání: | 2006 |
| Předmět: | |
| Zdroj: | The International Journal of Banking and Finance, Vol 3 (2006) |
| Druh dokumentu: | article |
| ISSN: | 2811-3799 2590-423X |
| Popis: | This paper presents findings on the impact of revisions to a unique bank regulation yet studied. An old hypothesis in banking literature is tested by examining share price reactions to two-way changes to statutory reserve ratio (SRR) requirement over a recent eight-year period. Announcements of these regulatory changes appear to lead to statistically and economically significant abnormal returns. These new findings suggest that a decrease in statutory reserve has a risk-reducing effect on financial institutions. Thus, this study provides a test of the prediction of theory that SRR is a powerful macroeconomics policy tool to revive an economy in the aftermath of a financial crisis. |
| Databáze: | Directory of Open Access Journals |
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