Right-wing election success and European Banks: Evidence from the 2024 European Elections

Abstract

As an outcome of the 2024 European elections, right-wing political parties have gained significant shares of votes in some EU member states, which has led to solidified right-wing representation in the European Parliament. This paper assesses the impact of the right-wing electoral behaviour on the stock price of European banks and uses event study methodology to produce evidence which suggests that right-wing political success tends to drive negative abnormal stock returns on the days succeeding the EU elections. As such, the paper delivers argumentation that right-wing political success impacts European financial stability and therefore also to the European investment environment.