Celebrating Success: Dr Vu Trinh

Congratulations to Dr Vu (Rainy) Trinh and co-authors, whose paper “Market Reaction to the Russian-Ukrainian War: A Global Analysis of the Banking Industry” has recently been accepted by Review of Accounting and Finance.

Abstract: The purpose of this paper is to study the market reactions of the banking industry to the Russian–Ukraine war. Using a large sample of 2316 banks from 90 stock markets worldwide, we first find a significant decline of almost 1.5% in return on the war date. Similar patterns were observed for all continents, but Europe had the most severe drop of about 4%. Second, after employing the market model and net-of-market return approach, we document a similar negative reaction to the war event. Third, the impacts of the war and sanctions were persistent when the war continued. Banks stocks were most hit in Europe, Asia, and North America. These stocks tended to respond aggressively pre-war when the likelihood of war grew. However, after the war event, these stocks are significantly driven by the oil price and exchange rate shocks. Our findings suggest that energy price and currency strength are two channels through which the war impacts bank stocks. Finally, we find evidence of overreaction in most affected regions.