We estimate the effect of the spring 2023 failures of Silicon Valley Bank and Signature Bank on the “connectedness” of US bank stock return volatilities using the forecast error variance decomposition framework of Diebold and Yilmaz (2012, 2014) and Lastrapes and Wiesen (2021). Using split-sample and time-varying VAR methods, we find that those failures significantly increased spillovers across a sample of surviving regional banks, but had only small and temporary effects on spillovers across systemically important too-big-to-fail banks. Our main findings imply that regulatory policy toward systemically important banks has been credible but that additional oversight of regional banks should be considered.

Using global data on syndicated loans, we show that any negative effect of stronger creditor rights on loan spreads, as identified in the prior literature (Qian and Strahan, 2007; Bae and Goyal, 2009), disappears once we include a single country characteristic: country size. This finding is robust to several identification methods, both global samples and within-country changes in creditor rights, different panel spans, and hundreds of control variables. We identify that key origins of the effect of country size on loan pricing are ethnic fractionalization and within-country heterogeneity in economic preferences, which create country risk.

Despite the rising number of green finance policies, the socioeconomic determinants shaping them remain largely unexamined. Drawing from the literature analysing the relationship between regulation, market development and institutional economics , we contend that green finance policy adoption is driven by both market-based and institutional factors. Using a survival analysis approach to understand the levers influencing green finance policy adoption across 188 countries from 2000 to 2019, we find that exposure to the fossil fuel industry predominantly drives the initial issuance of green finance policies. The positive effect of fossil fuel commercial financing on the adoption of green finance policies exists in countries with high and medium climate change awareness levels. Meanwhile, in countries with a low climate change awareness level, fossil fuel government subsidies drive green finance policy adoption. Our study also highlights the role of the financial industry as one of the key actors in the policy cycle of green finance policies via two pathways: (i) affecting financial stability through financing oil and gas companies on primary financial markets and (ii) developing a market for sustainable finance products.