Loading...
research article
This Time Is the Same: Using Bank Performance in 1998 to Explain Bank Performance during the Recent Financial Crisis
2012
Are some banks prone to perform poorly during crises? If yes, why? In this paper, we show that a bank's stock return performance during the 1998 crisis predicts its stock return performance and probability of failure during the recent financial crisis. This effect is economically large. Our findings are consistent with persistence in a bank's risk culture and/or aspects of its business model that make its performance sensitive to crises. Banks that relied more on short-term funding, had more leverage, and grew more are more likely to be banks that performed poorly in both crises.
Type
research article
Web of Science ID
WOS:000311374800005
Authors
Publication date
2012
Publisher
Published in
Volume
67
Issue
6
Start page
2139
End page
2185
Peer reviewed
REVIEWED
EPFL units
Available on Infoscience
February 27, 2013
Use this identifier to reference this record