Cziraki, Peter, Laux, Christian, Lóránth, Gyöngyi, (2016), “Understanding bank payouts during the financial crisis of 2007-2009”, VoxEu, 26 October
Banks’ payout decisions at the beginning of the financial crisis of 2007-2009 were particularly controversial as the crisis eroded the capital of many banks. Concerns were raised that banks may have engaged in wealth transfer to shareholders, or that they may have been reluctant to reduce dividends to avoid negative signalling. This column examines these arguments using a large dataset on US bank holding companies. Cross-sectional tests do not provide clear-cut evidence of active wealth transfer. Similarly, the evidence on signalling is mixed.
- Gaballo, Gaetano, Zetlin-Jones, Ariel, (2016), “Bailouts, Moral Hazard and Banks’ Home Bias for Sovereign Debt“, ESM Working Paper Series, July
- Hüttl, Pia, Schoenmaker, Dirk, (2016), “Fiscal capacity to support large banks”, Bruegel, 3 October