{"title":"Is Bank Failure a Risk to the Equity Market?","authors":"Chuhao Wang, Khan Khalid, Koseoglu Sinem Derindere","doi":"10.24818/18423264/58.1.24.20","DOIUrl":null,"url":null,"abstract":". This paper analyses the effect of the Silicon Valley Bank collapse on different sectors of U.S. equities based on forecasting counterfactual market responses. The findings suggest that bank collapse has a negative impact on the US equities. The results indicate rapid divergence from counterfactual predictions, and the actual equities are consistently lower than expected in the absence of collapse. The pointwise causal effect displays an estimate of the equities that fall following the collapse. In relative terms, these equities decreased between -3% and -10%. Moreover, the intervention's causal effect estimations indicate that the impact is particularly significant for the real estate, financial, and consumer discretionary sectors. As a result, investors and policymakers should enhance their regulatory structure, investigate cutting-edge technologies, build an early warning system, and seek social media's role in predicting bank runs.","PeriodicalId":51029,"journal":{"name":"Economic Computation and Economic Cybernetics Studies and Research","volume":null,"pages":null},"PeriodicalIF":1.4000,"publicationDate":"2024-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Computation and Economic Cybernetics Studies and Research","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.24818/18423264/58.1.24.20","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
. This paper analyses the effect of the Silicon Valley Bank collapse on different sectors of U.S. equities based on forecasting counterfactual market responses. The findings suggest that bank collapse has a negative impact on the US equities. The results indicate rapid divergence from counterfactual predictions, and the actual equities are consistently lower than expected in the absence of collapse. The pointwise causal effect displays an estimate of the equities that fall following the collapse. In relative terms, these equities decreased between -3% and -10%. Moreover, the intervention's causal effect estimations indicate that the impact is particularly significant for the real estate, financial, and consumer discretionary sectors. As a result, investors and policymakers should enhance their regulatory structure, investigate cutting-edge technologies, build an early warning system, and seek social media's role in predicting bank runs.
期刊介绍:
ECECSR is a refereed journal dedicated to publication of original articles in the fields of economic mathematical modeling, operations research, microeconomics, macroeconomics, mathematical programming, statistical analysis, game theory, artificial intelligence, and other topics from theoretical development to research on applied economic problems.
Published by the Academy of Economic Studies in Bucharest, it is the leading journal in the field of economic modeling from Romania.