Abnormal stock returns in Greece during the Cypriot banking crisis

Abstract

Purpose

The purpose of this paper is to examine the impact of the Cypriot banking crisis in specific bank stocks’ prices traded in the Athens Stock Exchange.

Design/methodology/approach

In the present study, event study methodology has been used. The basis of the event study is to examine the returns derived from the stock prices of the relevant banks before March 15, 2013.

Findings

This study focuses on three banks, Bank of Cyprus, Cyprus Popular Bank and Piraeus Bank, and finds abnormal stock returns during the ten-day period before the event date (announcement of prohibition and put under suspension trading of all movable securities of Bank of Cyprus and Cyprus Popular Bank). Also, an interesting matter is that during the estimation period and in specific dates, such as October 18, 22 and 23, 2012, a high volume of stocks trading took place in Bank of Cyprus and Cyprus Popular Bank.

Originality/value

To the best of the author’s knowledge, this is the first study examining it.

Citation

Repousis, S. (2016), "Abnormal stock returns in Greece during the Cypriot banking crisis", Journal of Money Laundering Control, Vol. 19 No. 2, pp. 122-129. https://doi.org/10.1108/JMLC-04-2015-0015