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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research

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The Dilemma of International Diversification: Evidence from the European Sovereign Debt Crisis, Asia-Pacific Journal of Financial Studies 2 (2020). Francis, Bill B.; Hasan, Iftekhar; Kostova, Gergana L.; Ben Naceur, Sami


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Francis, Bill B.; Hasan, Iftekhar; Kostova, Gergana L.; Ben Naceur, Sami 
Number of authors 4 
Status Published
Year of publication 2020 
Date 14.04.2020 
Name of article The Dilemma of International Diversification: Evidence from the European Sovereign Debt Crisis 
Name of journal Asia-Pacific Journal of Financial Studies
Volume of issue 49 
Number of issue 2 
Pages 299-346 
Abstract This paper tests how capital markets value the international diversification of banks in good and in bad economic times by investigating changes in domestic and foreign sovereign debt ratings before and during the European sovereign debt crisis. Tracing 320 European banks in 29 countries and 226 credit rating announcements for European sovereigns between 1 January 2001 and 15 August 2012, we show that the market values banks with access to foreign funds. Despite occasional adverse effects immediately following negative news regarding sovereign credit rating changes, international diversification was found to be beneficial to European banks, especially during periods of distress.
Free text descriptor in Finnish pankit; Eurooppa; pääomamarkkinat; hajautus; valtionvelka; kriisit; luottoluokitukset 
Free text descriptor in English banks; sovereign debt crisis; international diversification; Europe 
ISSN / e-ISSN 2041-6156 
auki Internet addresses