Regulatory sanctions and reputational damage in financial markets

Mayer, Colin, Armour, John and Polo, Andrea (2016) Regulatory sanctions and reputational damage in financial markets. Journal of Finance and Quantitative Analysis. pp. 1-20.

Abstract

We study the impact of the enforcement of financial regulation by the UK’s regulatory authorities on the market price of penalized firms. Existing studies rely on analyses of multiple events that may distort the measurement of reputational losses. In the UK, the entire enforcement process involves only one public announcement and is accompanied by complete information on legal penalties. We find that reputational losses are nearly nine times the size of fines, and are associated with misconduct harming customers or investors, but not third parties.

Item Type: Article
Keywords: Finance, Regulation, Reputation, Enforcement, Corporate Law, Financial Regulation
Subject(s): Finance
Date Deposited: 27 Jan 2016 16:55
Last Modified: 12 Jul 2017 10:21
Funders: not applicable
URI: http://eureka.sbs.ox.ac.uk/id/eprint/5880

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