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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Which Financial Stocks did Short Sellers Target in the Subprime Crisis?, Journal of Banking and Finance May (2015). Hasan, Iftekhar; Massoud, Nadia; Saunders, Anthony; Song, Keke


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Hasan, Iftekhar; Massoud, Nadia; Saunders, Anthony; Song, Keke 
Number of authors
Status Published
Year of publication 2015 
Date 06.01.2015 
Name of article Which Financial Stocks did Short Sellers Target in the Subprime Crisis? 
Name of journal Journal of Banking and Finance
Volume of issue 54 
Number of issue May 
Pages 87–103 
Abstract Tracing the SEC ban on the short selling of financial stocks in September 2008, this paper investigates whether such selling activity before the 2008 short ban reflected financial companies’ risk exposure in the subprime crisis. Evidence suggests that short sellers sold short stocks that had the greatest asset and insolvency risk exposures, and that the short selling of financial firms’ stocks was not significantly greater than that of non-financial firms after we match them on firm size and insolvency risk. When the short ban was in effect, the market quality of financial stocks without subprime assets exposure had deteriorated to a larger degree than that of financial companies with subprime assets exposure. The findings imply that such a regulation may mute the market disciplining effects of investors and may also be seen as a counterweight to any perceived macro or systemic risk reduction benefits resulting from such a ban.
Free text descriptor in English Short selling; Subprime assets; Financial crisis; Short-sale ban; CDS spread 
JEL-codes G01; G14; G28; G33 
ISSN / e-ISSN 0378-4266 
auki Internet addresses
Additional information Available online 6 January 2015.
Notes BoF DP 3/2015 


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