THE IMPACT OF THE FINANCIAL CRISIS AND ANTI-CYCLICAL PROCEDURES ADOPTED BY THE CENTRAL BANK IN THE STOCK PERFORMANCE OF BRAZILIAN BANKS FROM 2008 TO 2012

Theresângela Giongo Flores Araes, Pontifícia Universidade Católica de São Paulo, Brazil
José Odálio dos Santos, Pontifícia Universidade Católica de São Paulo, Brazil
João Carlos Douat, Fundação Getúlio Vargas, Brazil
José Renato Lamberti, Pontifícia Universidade Católica de São Paulo, Brazil
Rubens Famá, Pontifícia Universidade Católica de São Paulo, Brazil
Published in

 JOURNAL OF INTERNATIONAL FINANCE STUDIES
Volume 14, Issue 3, p63-78, October 2014

ABSTRACT

The bankruptcy of Lehman Brothers in 2008 rapidly provoked a severe systemic risk in the global banking industry and resulted in the worst financial crisis since the Great Depression in 1929. This crisis affected the Brazilian Financial System, contributing to the adoption of several prudential measures to soften their effects. As a consequence of such crisis, the European fiscal crisis started in mid-2010, with new expansive measures being adopted by Brazilian regulators in 2011. This study evaluated how these international financial crises and prudential measures adopted by the Brazilian Central Bank affected the stock performance of Brazilian Banks. Through the methodology of event study, it was noticed that the stock performance of the banks, in general, was not statistically affected by the selected events. This behavior can be partially explained by the dynamic nature of such events, which only happen after consecutive disclosure of relevant information about the economic environment and the companies to the market.

Keywords

Financial System, Financial Crises, Events Study


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