FINANCIAL RESILIENCE TO THE COVID-19 PANDEMIC: THE ROLE OF BANKING MARKET STRUCTURE
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Date
2021-03, 2021
Authors
Danışman, Gamze Öztürk
Demir, Ender
Zaremba, Adam
Journal Title
Journal ISSN
Volume Title
Publisher
ROUTLEDGE JOURNALS
Abstract
This article examines whether differences in banking market structures across countries influence the local stock market resilience to the COVID-19 pandemic. Using a sample of 66 countries for the period January 2020 to July 2020, our findings demonstrate that countries with more concentrated banking systems, with a higher presence of foreign banks, and a higher share of Islamic banks are more resilient to the pandemic. Considering the banking regulatory differences between countries, we observe that equity markets of countries with stricter regulatory requirements on capital and liquidity are more resilient to the COVID-19. Finally, regarding banking sector performance indicators, our findings show that while stock reactions of countries with more stable banking systems are more resilient to the pandemic; countries with more credit to deposit ratio, overhead costs, high provisions and nonperforming loans are more vulnerable. Our findings provide important implications for policymakers, regulatory bodies and investors.
Description
Keywords
COVID-19, resilience, stock return, banking structure, bank regulations, bank performance
Turkish CoHE Thesis Center URL
Citation
24
WoS Q
Q3
Scopus Q
Q2