Effect of commercial bank failure on performance of quoted Banks on NSE

Abstract

The focus of this study was to determine the impact of a commercial bank failure on stock returns of quoted banks. Determining stock returns of the quoted banks during the event window and comparing it with the returns 90 days before the event. The study was designed to establish existence of contagion effect, analysis revealed that on the average, stock returns of quoted banks decrease with collapse of a commercial bank and this was consistent with most studies elsewhere in the world. It my hope that this study will be a valuable addition to the scanty body of knowledge concermng market efficiency and contagion effect and will serve as a basis for future research.