Finance and Financial Management Commons^™

Italy (2008) Capital Injections, Manuel León Hoyos

Journal of Financial Crises

In response to the 2007–09 Global Financial Crisis, in October 2008, the Italian government announced urgent measures to guarantee financial stability and the flow of credit. The Italian government targeted three areas of support: (1) bank recapitalizations, (2) liquidity access, and (3) expansion of guarantees on bank deposits. This case study exclusively examines the Italian bank recapitalization scheme introduced in December 2008 in line with European Union State Aid rules.

The four Italian banks recapitalized in 2009 under the scheme were Banco Popolare (€1.45 billion), Banca Popolare di Milano (€500 million), Credito Valtellinese (€200 million), and Banca Montepaschi di Siena …

Greece (2008) – Capital Injections, Manuel León Hoyos

Journal of Financial Crises

In October 2008, in the midst of the Global Financial Crisis (2007–09), the Greek government announced a €28 billion ($36 billion) government package. Greek Law 3723/2008, “Enhancement of Liquidity in the Economy in Response to the Impact of the International Financial Crisis,” was passed and approved under European Union State Aid rules. The Greek law provided for three voluntary programs: recapitalizations (€5 billion), guarantees (€15 billion), and securities (€8 billion). This case study exclusively examines the recapitalization program. In this program, the Greek government acquired convertible preferred shares in banks in order to build and maintain banks’ Tier 1 capital …

Spain: Deposit Guarantee Fund Asset Management, Manuel León Hoyos

Journal of Financial Crises

The global oil shock in 1973-74 occurred at a time when Spain was embarking on a liberalization of its financial system that resulted in many new entrants, particularly small- and medium-sized institutions. The banking crisis that followed from 1977-85 affected 52 of the country’s 110 banks, most of them of small- and medium-sized, that comprised over 20% of bank deposits. Spain established the Deposit Guarantee Fund in November 1977 to provide limited deposit insurance, and, in March 1978, established a Banking Corporation to take control of and reorganize troubled banks. However, because the Banking Corporation lacked the legal authority to …

The Effects Of Bank Lobbying And Elections Surprises, Gregory Logan Tarbet

All Graduate Plan B and other Reports, Spring 1920 to Spring 2023

This paper examines the stock market reaction to banks that lobby relative to banks that did not lobby in the period around the November 9, 2016, U.S. presidential election. Using three different methods of event studies to calculate the cumulative average return, we find that lobbying in banks has a meaningful relationship to an abnormal increase in those firm’s stock prices. Then we attempt to control for both the systemic importance and size of these institutions by performing cross-sectional regressions that include matched size, and the systemic nature of the banks. The results suggest that a heavily regulated industry such …