Understanding Bank Payouts During the Crisis of 2007-2009

83 Pages Posted: 24 Jun 2015 Last revised: 6 Apr 2022

See all articles by Peter Cziraki

Peter Cziraki

Texas A&M University - Department of Finance; Tilburg Law and Economics Center (TILEC)

Christian Laux

Vienna University of Economics and Business; Vienna Graduate School of Finance (VGSF); European Corporate Governance Institute (ECGI)

Gyongyi Loranth

University of Vienna; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: January 27, 2022

Abstract

We study U.S. banks’ payout policy in 2007-2008. We benchmark these payouts against payouts before the crisis, measure stock price reactions to announcements of dividend changes, and analyze changes in the relation between payout growth and future performance. Further, we examine cross-sectional variation in banks’ payout policy to gauge the possible motives underlying banks’ payout decisions in 2007-2008. We do not find that banks that have a higher willingness to take risk or that have higher incentives to undertake asset substitution use their payout policy to engage in more wealth transfer compared to other banks.

Keywords: dividends, total payout, financial crisis, insider trading

JEL Classification: G21, G24, G28, G32, G35

Suggested Citation

Cziraki, Peter and Laux, Christian and Loranth, Gyongyi, Understanding Bank Payouts During the Crisis of 2007-2009 (January 27, 2022). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 480/2016, TILEC Discussion Paper No. 2016-019, Review of Corporate Finance Studies, forthcoming, Available at SSRN: https://ssrn.com/abstract=2621772 or http://dx.doi.org/10.2139/ssrn.2621772

Peter Cziraki (Contact Author)

Texas A&M University - Department of Finance ( email )

430 Wehner
College Station, TX 77843-4218
United States
979 845 1136 (Phone)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Christian Laux

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Vienna Graduate School of Finance (VGSF) ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Gyongyi Loranth

University of Vienna ( email )

Vienna

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
619
Abstract Views
3,689
Rank
79,299
PlumX Metrics