The Impact of Refinancing Rate Announcement on Stock Prices of European, American and Asian Banks

Student: Fedorenko Alena

Faculty: Faculty of World Economy and International Affairs

Educational Programme: World Economy (Bachelor)

Year of Graduation: 2020

Recent decisions in 2019 to reduce key rates or refinancing rates around the world are the results of slower inflation and improved economic well-being. In this regard, many analysts are wondering how this will affect the main participants in the financial system: banks and their stocks. This study aims at examining the short-term effects of changes in key rates on bank shares over the next 15 days after the announcement of the decision. The method of event analysis will be used, which includes three models: a standard with an average, a simple market model, and CAPM. For completeness of the research, 4 exchanges are analyzed: Moscow, New York, Hong Kong, and Frankfurt. Data will include share prices of more than 50 banks over a period of 20 years. As a result of the study, expected practical conclusions can be used by investors and senior management to play on the stock exchange.

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