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HOW DO THE ECB MEETINGS AFFECT THE STOCK VALUATIONS OF FOUR IBEX35 BANKS?
Corresponding Author(s) : Samer Ajour El Zain
Humanities & Social Sciences Reviews,
Vol. 9 No. 3 (2021): May
Abstract
Purpose: Analyze the data and draw there were any relevant conclusions between the meetings of the central bank and the movements of the banking corporations in the stock market.
Methodology: To carry out this study, it was necessary to obtain two extremely important data sets (exact dates of the ECB meetings, stock market valuations of the four banking entities understudy). Both were obtained by searching on specialized websites. Then a comparison of the variations, a correlation table, which will allow us to mathematically affirm whether there is a linear relationship and proportionality between the variations of the banks or not, were analyzed.
Main Findings: The results obtained indicate that such influence on the part of the European Central Bank on the financial entities listed on the IBEX35 does not exist, since the variations between bank shares are random and maybe would be better explained by other hypotheses or inputs.
Application of Study: This work discards the hypothesis proposed by the student, although it manages to find other interesting relationships between banks because of the correlation analysis carried out in the analysis part of the work.
Novelty/Originality: Establish the relationship between the meetings of the central bank and the movements of the banking corporations in the stock market.
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- Ahmed, A. S., & Takeda, C. (1995). Stock market valuation of gains and losses on commercial banks' investment securities An empirical analysis. Journal of Accounting and Economics, 20(2), 207-225. https://doi.org/10.1016/0165-4101(95)00396-Z DOI: https://doi.org/10.1016/0165-4101(95)00396-Z
- Balani, H. (2019). Assessing the introduction of anti-money laundering regulations on bank stock valuation. Journal of Money Laundering Control. https://doi.org/10.1108/JMLC-03-2018-0021 DOI: https://doi.org/10.1108/JMLC-03-2018-0021
- BBVA. (1 de diciembre de 2016). Obtenido de https://www.bbva.com/es/consecuencias-una-bajada-tipos-interes/
- BBVA. (1 de abril de 2019). Obtenido de https://www.bbva.com/es/como-afectan-los-tipos-bajos-de-interes-a-la-rentabilidad-de-la-banca/
- BCE. (12 de junio de 2014). Banco Central Europeo. Obtenido de https://www.ecb.europa.eu/explainers/tell-me-more/html/why-negative-interest-rate.es.html
- BCE. (s.f.). BCE. Obtenido de https://www.ecb.europa.eu/ecb/history/html/index.es.html
- Bertsatos, G., Sakellaris, P., & Tsionas, M. G. (2017). Did the financial crisis affect the market valuation of large systemic US banks?. Journal of Financial Stability, 32, 115-123. https://doi.org/10.1016/j.jfs. 2017.09.002 DOI: https://doi.org/10.1016/j.jfs.2017.09.002
- Boubakri, N., Chen, R., Guedhami, O., & Li, X. (2019). The Stock Liquidity of Banks: A Comparison between Islamic and Conventional Banks in Emerging Economies. Emerging Markets Review, 39, 210-224. https://doi.org/10.1016/j.ememar.2019.03.006 DOI: https://doi.org/10.1016/j.ememar.2019.03.006
- Cinco DÃas. (1 de mayo de 2020). Obtenido de https://cincodias.elpais.com/cincodias/2020/04/3 0/mercados/1588245972_643544.html
- Deia. (12 de marzo de 2020). Deia. Obtenido de https://www.deia.eus/economia/2020/03/12/bce-mantiene-tipos-interes-compra/1024236.html
- Elnahass, M., Omoteso, K., Salama, A., & Trinh, V. Q. (2019). Differential market valuations of board busyness across alternative banking models. Review of Quantitative Finance and Accounting, 1-38. https://doi.org/10.1007/s11156-019-00841-4 DOI: https://doi.org/10.1007/s11156-019-00841-4
- España, B. D. (s.f.). BDE. Obtenido de BDE: https://www.bde.es/bde/es/secciones/prensa/Notas_y_d ecision/Decisiones_de_po/index2019.html
- Forte, G., Gianfrate, G., & Rossi, E. (2020). Does relative valuation work for banks?. Global Finance Journal, 44, 100449. https://doi.org/10.1016/j.gfj.2018.09.002 DOI: https://doi.org/10.1016/j.gfj.2018.09.002
- Fundssociety. (22 de enero de 2019). Obtenido de https://www.fundssociety.com/es/noticias/mercados/asi-es-la-agenda-de-reuniones-del-banco-central-europeo-para-2019
- La voz de Galicia. (18 de octubre de 2019). Obtenido de https://www.lavozdegalicia.es/noticia/contenidos-patrocinados/2018/10/24/tipos-interes-repercusion-mercados-financieros/00031540377544026660886.htm
- Lacalle, D. (26 de Septembre de 2017). Youtube. Obtenido de https://www.youtube.com/watch?v =xODwNYHOPNw
- Rasheed, A., Khalid Sohail, M., Din, S. U., & Ijaz, M. (2018). How Do Investment Banks Price Initial Public Offerings? An Empirical Analysis of Emerging Market. International Journal of Financial Studies, 6(3), 77. https://doi.org/10.3390/ijfs6030077 DOI: https://doi.org/10.3390/ijfs6030077
- Schepens, G. (13 de febrero de 2018). European Central Bank. Obtenido de https://www.ecb.europa.eu/pub/ economic-research/resbull/2018/html/ecb.rb180213.en.html
- Vo, X. V. (2017). How does the stock market value bank diversification? Evidence from Vietnam. Finance Research Letters, 22, 101-104. https://doi.org/10.1016/j.frl.2017.06.005 DOI: https://doi.org/10.1016/j.frl.2017.06.005
- Warrad, L. H. (2017). The Effect of Market Valuation Measures on Stock Price: An Empirical Investigation on Jordanian Banks. International Journal of Business and Social Science, 8(3), 67-74.
References
Ahmed, A. S., & Takeda, C. (1995). Stock market valuation of gains and losses on commercial banks' investment securities An empirical analysis. Journal of Accounting and Economics, 20(2), 207-225. https://doi.org/10.1016/0165-4101(95)00396-Z DOI: https://doi.org/10.1016/0165-4101(95)00396-Z
Balani, H. (2019). Assessing the introduction of anti-money laundering regulations on bank stock valuation. Journal of Money Laundering Control. https://doi.org/10.1108/JMLC-03-2018-0021 DOI: https://doi.org/10.1108/JMLC-03-2018-0021
BBVA. (1 de diciembre de 2016). Obtenido de https://www.bbva.com/es/consecuencias-una-bajada-tipos-interes/
BBVA. (1 de abril de 2019). Obtenido de https://www.bbva.com/es/como-afectan-los-tipos-bajos-de-interes-a-la-rentabilidad-de-la-banca/
BCE. (12 de junio de 2014). Banco Central Europeo. Obtenido de https://www.ecb.europa.eu/explainers/tell-me-more/html/why-negative-interest-rate.es.html
BCE. (s.f.). BCE. Obtenido de https://www.ecb.europa.eu/ecb/history/html/index.es.html
Bertsatos, G., Sakellaris, P., & Tsionas, M. G. (2017). Did the financial crisis affect the market valuation of large systemic US banks?. Journal of Financial Stability, 32, 115-123. https://doi.org/10.1016/j.jfs. 2017.09.002 DOI: https://doi.org/10.1016/j.jfs.2017.09.002
Boubakri, N., Chen, R., Guedhami, O., & Li, X. (2019). The Stock Liquidity of Banks: A Comparison between Islamic and Conventional Banks in Emerging Economies. Emerging Markets Review, 39, 210-224. https://doi.org/10.1016/j.ememar.2019.03.006 DOI: https://doi.org/10.1016/j.ememar.2019.03.006
Cinco DÃas. (1 de mayo de 2020). Obtenido de https://cincodias.elpais.com/cincodias/2020/04/3 0/mercados/1588245972_643544.html
Deia. (12 de marzo de 2020). Deia. Obtenido de https://www.deia.eus/economia/2020/03/12/bce-mantiene-tipos-interes-compra/1024236.html
Elnahass, M., Omoteso, K., Salama, A., & Trinh, V. Q. (2019). Differential market valuations of board busyness across alternative banking models. Review of Quantitative Finance and Accounting, 1-38. https://doi.org/10.1007/s11156-019-00841-4 DOI: https://doi.org/10.1007/s11156-019-00841-4
España, B. D. (s.f.). BDE. Obtenido de BDE: https://www.bde.es/bde/es/secciones/prensa/Notas_y_d ecision/Decisiones_de_po/index2019.html
Forte, G., Gianfrate, G., & Rossi, E. (2020). Does relative valuation work for banks?. Global Finance Journal, 44, 100449. https://doi.org/10.1016/j.gfj.2018.09.002 DOI: https://doi.org/10.1016/j.gfj.2018.09.002
Fundssociety. (22 de enero de 2019). Obtenido de https://www.fundssociety.com/es/noticias/mercados/asi-es-la-agenda-de-reuniones-del-banco-central-europeo-para-2019
La voz de Galicia. (18 de octubre de 2019). Obtenido de https://www.lavozdegalicia.es/noticia/contenidos-patrocinados/2018/10/24/tipos-interes-repercusion-mercados-financieros/00031540377544026660886.htm
Lacalle, D. (26 de Septembre de 2017). Youtube. Obtenido de https://www.youtube.com/watch?v =xODwNYHOPNw
Rasheed, A., Khalid Sohail, M., Din, S. U., & Ijaz, M. (2018). How Do Investment Banks Price Initial Public Offerings? An Empirical Analysis of Emerging Market. International Journal of Financial Studies, 6(3), 77. https://doi.org/10.3390/ijfs6030077 DOI: https://doi.org/10.3390/ijfs6030077
Schepens, G. (13 de febrero de 2018). European Central Bank. Obtenido de https://www.ecb.europa.eu/pub/ economic-research/resbull/2018/html/ecb.rb180213.en.html
Vo, X. V. (2017). How does the stock market value bank diversification? Evidence from Vietnam. Finance Research Letters, 22, 101-104. https://doi.org/10.1016/j.frl.2017.06.005 DOI: https://doi.org/10.1016/j.frl.2017.06.005
Warrad, L. H. (2017). The Effect of Market Valuation Measures on Stock Price: An Empirical Investigation on Jordanian Banks. International Journal of Business and Social Science, 8(3), 67-74.