An Empirical Investigation into the Failure of First RepublicBank: Is There a Contagion Effect?

Abstract

Abstract This study examines the presence of contagion effects associated with the failure of First RepublicBank. Banks are segregated on the basis of whether their stock price reactions are likely due to industry‐based information effects or contagion effects. Also considered are announcements during the same period of time associated with Third World loans. Results fail to substantiate the presence of contagion effects.