The effect of supranational banking supervision on the financial sector: Event study evidence from Europe

Arbeitspapier

This paper investigates how the introduction of the Single Supervisory Mechanism, the European Union's implementation of harmonized banking supervision, has affected the banking sector in Europe. I perform an event study on banks' stock returns and find evidence for small but significant positive effects. A potential hypothesis for this result is the fact that a single supervisory authority can take spillover effects between countries into account and is therefore able to stabilize the European banking sector. Splitting the sample by an indicator for supervisory power, an indicator for corruption and by Debt/GDP reveals that the positive impact of the SSM was stronger for banks in countries that perform poorly with respect to these measures.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2017-5

Classification and Topics

• Classification: Wirtschaft ; Financial Institutions and Services: Government Policy and Regulation ; Intergovernmental Relations; Federalism; Secession ; International Institutional Arrangements
• Subject: banks ; event study ; supervision ; SSM ; harmonization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Loipersberger, Florian
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2017

Further information

• DOI: doi:10.5282/ubm/epub.34610
• Handle: http://hdl.handle.net/10419/162383
• URN: urn:nbn:de:bvb:19-epub-34610-3
• Last update: 10.03.2025, 11:45 AM CET