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Is my bank the same? heterogeneity in market reactions to the silicon valley bank and signature bank failures

Shaker Ahmed & Timothy King

Journal of Accounting and Public Policy2026https://doi.org/10.1016/j.jaccpubpol.2026.107432article
AJG 3ABDC A*
Weight
0.50

Abstract

• We document early and significant bank stock losses around SVB and SB failures. • Investor reactions to the SVB and SB shock are negative on average. • Market reactions vary according to the extent of common exposure. • Banks with common exposures to SVB and SB have more severe stock price losses. This paper examines stock market reactions to the Silicon Valley Bank (SVB) and Signature Bank (SB) failures in March 2023. Using an event study of U.S. bank holding companies, we document significant negative abnormal returns surrounding the failures, with losses emerging prior to the SVB closure and intensifying on the event dates. We further analyze cross-sectional heterogeneity in market reactions based on banks’ common exposures to SVB and SB. Banks with similar balance sheet characteristics—particularly large holdings of held-to-maturity and available-for-sale securities, sizable unrealized losses, concentrated lending portfolios, and high uninsured deposits—experienced significantly more adverse stock price responses. These findings are consistent with an indirect contagion channel in which investors react to common unfavorable signals rather than direct interbank linkages. Overall, the results inform ongoing policy debates regarding accounting measurement, disclosure, and banking sector stability during periods of systemic stress.

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https://doi.org/https://doi.org/10.1016/j.jaccpubpol.2026.107432

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@article{shaker2026,
  title        = {{Is my bank the same? heterogeneity in market reactions to the silicon valley bank and signature bank failures}},
  author       = {Shaker Ahmed & Timothy King},
  journal      = {Journal of Accounting and Public Policy},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.jaccpubpol.2026.107432},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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