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The impact of the SVB collapse on global financial markets: Substantial but narrow

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  • Yousaf, Imran
  • Riaz, Yasir
  • Goodell, John W.

Abstract

We investigate the impact of the collapse of Silicon Valley Bank on global financial markets, identifying significant but narrow impacts. Abnormal returns are significant and negative for US equities, global banks, Bitcoin, as well as GCC equities. However, abnormal returns are insignificant for most fiat currencies, metals, and energy markets. That the SVB collapse had minimal effects on these markets suggests that the SVB event had a major but constrained effect on the global financial system, affecting significantly a small number of markets while largely ignoring others. Results highlight possible contagion points with regard to reactions to banking stress.

Suggested Citation

  • Yousaf, Imran & Riaz, Yasir & Goodell, John W., 2023. "The impact of the SVB collapse on global financial markets: Substantial but narrow," Finance Research Letters, Elsevier, vol. 55(PB).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pb:s1544612323003203
    DOI: 10.1016/j.frl.2023.103948
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    Cited by:

    1. Akhtaruzzaman, Md & Boubaker, Sabri & Goodell, John W., 2023. "Did the collapse of Silicon Valley Bank catalyze financial contagion?," Finance Research Letters, Elsevier, vol. 56(C).
    2. Qin Wang & Guangsheng Yu & Shiping Chen, 2023. "Cryptocurrency in the Aftermath: Unveiling the Impact of the SVB Collapse," Papers 2311.10720, arXiv.org.
    3. Azmi, Wajahat & Anwer, Zaheer & Azmi, Shujaat Naeem & Nobanee, Haitham, 2023. "How did major global asset classes respond to Silicon Valley Bank failure?," Finance Research Letters, Elsevier, vol. 56(C).

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    More about this item

    Keywords

    Silicon Valley Bank; Bank run; Global financial markets; Event study; Contagion;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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