Cover Image

Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach

This study investigated stock market reaction and the effect of the implementation of Basel II and Basel III on stock returns of South African banks. In achieving this aim, this study focused on daily and annual data of six commercial banks from 3rd January 2004 to 31st December 2022. The event stud...

Full description

Saved in:
Bibliographic Details
Main Authors: Oyetade, Damilola, Muzindutsi, Paul-Francois
Format: Article
Language:English
Published: Universiti Utara Malaysia Press 2024
Subjects:
HB Economic Theory
Online Access:https://repo.uum.edu.my/id/eprint/31244/1/IJBF%2019%2002%202024%20183-210.pdf
https://doi.org/10.32890/ijbf2024.19.2.3
https://repo.uum.edu.my/id/eprint/31244/
https://e-journal.uum.edu.my/index.php/ijbf/article/view/20507
https://doi.org/10.32890/ijbf2024.19.2.3
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.uum.repo.31244
record_format eprints
spelling my.uum.repo.312442024-08-11T05:10:08Z https://repo.uum.edu.my/id/eprint/31244/ Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach Oyetade, Damilola Muzindutsi, Paul-Francois HB Economic Theory This study investigated stock market reaction and the effect of the implementation of Basel II and Basel III on stock returns of South African banks. In achieving this aim, this study focused on daily and annual data of six commercial banks from 3rd January 2004 to 31st December 2022. The event study methodology was employed to identify abnormal returns around the specified event dates. The effect of the changes in Basel capital requirements on stock returns was not uniform across the four events. The market reacted favourably to the implementation of the Basel II requirements in the country. There was a significantly negative market reaction to the subsequent full implementation of Basel III official. Finally, higher Basel capital requirements (CAR) was associated with lower bank stock returns. The findings implied that bank regulators increase capital to strengthen the banking system but constrain the maximisation of shareholders’values Universiti Utara Malaysia Press 2024 Article PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/31244/1/IJBF%2019%2002%202024%20183-210.pdf Oyetade, Damilola and Muzindutsi, Paul-Francois (2024) Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach. The International Journal of Banking and Finance, 19 (2). pp. 183-210. ISSN 1675-7227 https://e-journal.uum.edu.my/index.php/ijbf/article/view/20507 https://doi.org/10.32890/ijbf2024.19.2.3 https://doi.org/10.32890/ijbf2024.19.2.3
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
language English
topic HB Economic Theory
spellingShingle HB Economic Theory
Oyetade, Damilola
Muzindutsi, Paul-Francois
Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
description This study investigated stock market reaction and the effect of the implementation of Basel II and Basel III on stock returns of South African banks. In achieving this aim, this study focused on daily and annual data of six commercial banks from 3rd January 2004 to 31st December 2022. The event study methodology was employed to identify abnormal returns around the specified event dates. The effect of the changes in Basel capital requirements on stock returns was not uniform across the four events. The market reacted favourably to the implementation of the Basel II requirements in the country. There was a significantly negative market reaction to the subsequent full implementation of Basel III official. Finally, higher Basel capital requirements (CAR) was associated with lower bank stock returns. The findings implied that bank regulators increase capital to strengthen the banking system but constrain the maximisation of shareholders’values
format Article
author Oyetade, Damilola
Muzindutsi, Paul-Francois
author_facet Oyetade, Damilola
Muzindutsi, Paul-Francois
author_sort Oyetade, Damilola
title Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
title_short Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
title_full Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
title_fullStr Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
title_full_unstemmed Market Reaction to the Implementation of Basel Capital in South African Banks: Event Study Approach
title_sort market reaction to the implementation of basel capital in south african banks: event study approach
publisher Universiti Utara Malaysia Press
publishDate 2024
url https://repo.uum.edu.my/id/eprint/31244/1/IJBF%2019%2002%202024%20183-210.pdf
https://doi.org/10.32890/ijbf2024.19.2.3
https://repo.uum.edu.my/id/eprint/31244/
https://e-journal.uum.edu.my/index.php/ijbf/article/view/20507
https://doi.org/10.32890/ijbf2024.19.2.3
_version_ 1809150981510791168
score 13.211869

Similar Items