Document Type
White Paper
Publication Date
1989
Abstract
Citicorp's announcement of a sizeable increase to its loan loss reserve account was a landmark public admission of possible loan default by Third World debtor nations. This paper analyzes the impact of the announcement on Citicorp, the banking industry, and the stock market. The results provide evidence of a positive response to Citicorp's action. There is additional evidence that the size of the market response is related to an individual bank's degree of international loan exposure.
Recommended Citation
Hatfield, Gay B. and Carol Lancaster. 1989. "Announcement Effects on Bank Stock Prices: Citicorp’s Increase in Loan Loss Reserves for Third World Debt." E.C.R.S.B. 89-7. Robins School of Business White Paper Series. University of Richmond, Richmond, Virginia.