The relationship between the Brazilian interest payments moratorium and bank equity returns: evidence from the London Stock Exchange

Abstract

This study examines the effects of the Brazilian interest payments moratorium announcement on the equity return levels of several large US and European commericial banks traded on the London Stock Exchange. The empirical evidence suggests that, in general, the equity prives of the sample banks immediately reflected the relevant information associated with the announcement. However, some degree of pricing inefficiency was determined to exist, as the market was unable to discriminate among banks of the basis of exposure to Brazilian loans.

¹All views expressed in this paper are those of the authors and do not represent the views of Boeing Aerospace Operations, Inc.

¹All views expressed in this paper are those of the authors and do not represent the views of Boeing Aerospace Operations, Inc.

Notes

¹All views expressed in this paper are those of the authors and do not represent the views of Boeing Aerospace Operations, Inc.