Market discipline during crisis : Evidence from bank depositors in transition countries

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dc.contributor Bank of Finland Hasan, Iftekhar Jackowicz, Krzysztof Kowalewski, Oskar Kozłowski, Łukasz 2014-09-22T08:00:14Z 2014-09-22T08:00:14Z 2013
dc.identifier.isbn 978-952-6699-26-4
dc.identifier.issn 1456-5889
dc.description Ilmestynyt myös Journal of Banking & Finance 2013 ; December.
dc.description.abstract The Central European banking industry is dominated by foreign-owned banks. During the recent crisis, for the first time since the transition, foreign parent companies were frequently in a worse financial condition than their subsidiaries. This situation created a unique opportunity to study new aspects of market discipline exercised by non-financial depositors. Using a comprehensive data set, we find that the recent crisis did not change the sensitivity of deposit growth rates to accounting risk measures. We establish that depositors' actions were more strongly influenced by negative press rumors concerning parent companies than by fundamentals. The impact of rumors was especially perceptible when rumors turned out ex post to be founded. Additionally, we document that public aid announcements were primarily interpreted by depositors as confirmation of a parent company's financial distress. Our results, indicating that depositors react rationally to sources of information other than financial statements, have policy implications, as depositor discipline is usually the only viable and universal source of market discipline for banks in emerging economies. JEL classification: G21; G28. Keywords: depositor behavior; market discipline; crisis; emerging markets; market rumors
dc.format.extent 44 s.
dc.language.iso eng
dc.relation.ispartofseries BOFIT Discussion Papers
dc.subject pankkitoiminta
dc.subject talletukset
dc.subject kehittyvät markkinat
dc.subject kriisit
dc.subject riskit
dc.subject informaatio
dc.subject Itä-Eurooppa
dc.subject käyttäytyminen
dc.subject ulkomaiset pankit
dc.subject SP
dc.subject RP
dc.subject RP ST
dc.subject Bofit-kokoelma
dc.subject huhut
dc.subject tallettajat
dc.title Market discipline during crisis : Evidence from bank depositors in transition countries
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-201408072111
dc.subject.jel G21
dc.subject.jel G28 BOFIT Discussion Papers
dc.series.year 2013
dc.series.number 21/2013
dc.series.sortingnumber 21 14.8.2013
dc.identifier.doi 10.1016/j.jbankfin.2013.06.007
dc.contributor.orgunit Institute for Economies in Transition (BOFIT)
dc.description.publication Published in Journal of Banking & Finance, Volume 37, Issue 12, December 2013, Pages 5436–5451

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