Anticipating the financial crisis: evidence from insider trading in banks
Mostra el registre complet Registre parcial de l'ítem
- dc.contributor.author Akin, Ozlem
- dc.contributor.author Marín, José M.
- dc.contributor.author Peydró, José-Luis
- dc.date.accessioned 2019-04-12T07:29:51Z
- dc.date.available 2019-04-12T07:29:51Z
- dc.date.issued 2019
- dc.description.abstract Banking crises are recurrent phenomena, often induced by excessive bank risk-taking, which may be due to behavioral reasons (over-optimistic banks neglecting risks) and to agency problems between bank shareholders with debt-holders and taxpayers (banks understand high risk-taking). We test whether US banks’ stock returns in the 2007-08 crisis are related to bank insiders’ sales of their own bank shares in the period prior to 2006:Q2 (the peak and reversal in real estate prices). We find that top-five executives’ sales of shares predict the cross-section of banks returns during the crisis; interestingly, effects are insignificant for independent directors’ and other officers’ sales. Moreover, the top-five executives’ significant impact is stronger for banks with higher exposure to the real estate bubble, where an increase of one standard deviation of insider sales is associated with a 13.33 percentage point drop in stock returns during the crisis period. The informational content of bank insider trading before the crisis suggests that insiders understood the excessive risk-taking in their banks, which has important implications for theory, public policy and the understanding of crises.ca
- dc.description.sponsorship José M. Marín acknowledges financial support from the Spanish Ministry of Economics and Competitiveness (project ECO2015-69205) and José Luis Peydró rom both the Spanish Ministry of Economics and Competitiveness (project ECO2012-32434) and the European Research Council Grant (project 648398).
- dc.format.mimetype application/pdf*
- dc.identifier.uri http://hdl.handle.net/10230/37099
- dc.language.iso catca
- dc.relation.ispartofseries Economic Working Paper Series;1524
- dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2015-69205
- dc.relation.projectID info:eu-repo/grantAgreement/ES/3PN/ECO2012-32434
- dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/648398
- dc.rights.accessRights info:eu-repo/semantics/openAccessca
- dc.subject.keyword Financial crises
- dc.subject.keyword Insider trading
- dc.subject.keyword Banking
- dc.subject.keyword Risk-taking
- dc.subject.keyword Agency
- dc.subject.keyword Problems in firms
- dc.title Anticipating the financial crisis: evidence from insider trading in banksca
- dc.type info:eu-repo/semantics/workingPaperca