The International Debt Crisis, Investor Contagion, and Bank Security Returns in 1987: The Brazilian Experience
We use event-study methods to examine security returns for the 25 largest U.S. bank holding companies surrounding two events: (1) Citicorp's $3 billion loan-loss-reserve decision of May 19, 1987 and (2) subsequent follow-the-leader behavior by other major banking companies. Although the market...
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| Veröffentlicht in: | Journal of money, credit and banking credit and banking, 1990-05, Vol.22 (2), p.209-220 |
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| container_title | Journal of money, credit and banking |
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| creator | Musumeci, James J. Sinkey, Joseph F. |
| description | We use event-study methods to examine security returns for the 25 largest U.S. bank holding companies surrounding two events: (1) Citicorp's $3 billion loan-loss-reserve decision of May 19, 1987 and (2) subsequent follow-the-leader behavior by other major banking companies. Although the market anticipated rational follow-the-leader behavior and rewarded it, the events were only partially anticipated. We interpret the loan-loss-reserve decisions as foreshadowing the write-down of LDC loans. Such bookkeeping entries affect market prices because they signal economic value-enhancing corporate and strategic restructurings. (Printed by permission of the publisher.) |
| doi_str_mv | 10.2307/1992308 |
| format | Article |
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Although the market anticipated rational follow-the-leader behavior and rewarded it, the events were only partially anticipated. We interpret the loan-loss-reserve decisions as foreshadowing the write-down of LDC loans. Such bookkeeping entries affect market prices because they signal economic value-enhancing corporate and strategic restructurings. 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Although the market anticipated rational follow-the-leader behavior and rewarded it, the events were only partially anticipated. We interpret the loan-loss-reserve decisions as foreshadowing the write-down of LDC loans. Such bookkeeping entries affect market prices because they signal economic value-enhancing corporate and strategic restructurings. 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| identifier | ISSN: 0022-2879 |
| ispartof | Journal of money, credit and banking, 1990-05, Vol.22 (2), p.209-220 |
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| language | eng |
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| source | Periodicals Index Online; JSTOR Archive Collection A-Z Listing |
| subjects | Bank capital Bank loans Bank portfolios Bank stocks Banking crises Banking industry Brazil Debt Debt management Debt market Developing countries Disclosure Economic aspects Equity External debt International Lending Ldcs Investors LDCs Manycompanies Market prices National debt Prices and rates Public debts Regression analysis Requirements Secondary markets Stock prices Stocks Studies |
| title | The International Debt Crisis, Investor Contagion, and Bank Security Returns in 1987: The Brazilian Experience |
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