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Bank stocks and Roosevelt’s bank holiday

Author

Listed:
  • Weidenmier, Marc
  • Vossmeyer, Angela
  • Stella, Nathan
  • Aldanmaz, Oncel

Abstract

Roosevelt’s Bank Holiday in March 1933 aimed to halt bank runs and implement licensing for banks. Using a new hand-collected daily database, we examine how bank stocks and bond markets responded to this sweeping regulation. We find that New York City banks saw significant negative abnormal returns, while Chicago banks experienced positive returns, highlighting regional differences in perceptions of the policy. Corporate bond yields fell by 1.4 percentage points, lowering interest rates. Our findings show how markets reacted differently across regions and asset classes to this critical intervention.

Suggested Citation

  • Weidenmier, Marc & Vossmeyer, Angela & Stella, Nathan & Aldanmaz, Oncel, 2025. "Bank stocks and Roosevelt’s bank holiday," Economics Letters, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003763
    DOI: 10.1016/j.econlet.2025.112539
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-

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