The study examines the dynamics of herding behavior in relation to macroeconomic shocks and monetary policy shifts in the Bangladesh equity market. By employing robust empirical methodologies across distinct market states including bullish, bearish, crisis, extended crisis, and COVID-19 phases,...

The results reveal significant evidence of herding in the overall, bearish, and extended crisis market phases during extreme downturns, while the magnitude of market returns in the tail distribution is considered. Asymmetric herding behavior is more pronounced and prevalent, conditioned by...

Regulatory sandboxes have emerged as policy instruments designed to support FinTech innovation while maintaining supervisory oversight. By allowing firms to test financial products in controlled environments, sandboxes aim to reduce regulatory uncertainty and facilitate market entry. Despite...

This study applies Gradient Boosting Machines (GBMs) and principal component regression (PCR) to forecast the closing price of the Johannesburg Stock Exchange (JSE) All-Share Index (ALSI), using daily data from 2009 to 2024, sourced from the Wall Street Journal. The models are evaluated under...

The global economy frequently experiences cycles of rapid growth followed by abrupt crashes, challenging economists and analysts in forecasting and risk management. Crashes like the dot-com bubble crash and the 2008 global financial crisis caused huge disruptions to the world economy. These...

To control for the endogeneity problem, this study applies the two-stage least squares technique to examine the impact of bank and stock market development on economic growth in the thirteen Central and Eastern European (CEE) countries in the European Union (EU) during 2001-2020. The first...

Investor sentiment has the potential to serve as a predictive factor for cryptocurrency assets, yet its impact on volatility spillover across markets remains uncertain. This research investigates the influence of investor sentiment classification on the volatility spillover from stablecoins to...

Due to market volatility and complex regulations, forecasting stock price movements within the European banking sector is highly challenging. This study compares the predictive performance of Bidirectional Long Short-Term Memory (BiLSTM) and Long Short- Term Memory (LSTM) with traditional models...

Political risk, one of the most significant uncertainty shocks, affects firms' future attitudes toward risks and plays a crucial role in their decision making. A stock price crash risk is a classical topic in financial markets; therefore, this paper probes the relationship between firm-level...

In the evolving global economic landscape marked by technological advancements, liberalized markets, and the ascent of multinational corporations, Islamic banks have emerged as pivotal entities within the new economic paradigm, addressing the financial needs of societies eschewing Riba...

In 1936, John Maynard Keynes proposed that emotions and instincts are pivotal in decision-making, particularly for investors. Both positive and negative moods can influence judgments and decisions, extending to economic and financial choices. Intuitions, emotional states, and biases...

This study examined participants' willingness to pay for stock price forecasts provided by an algorithm, financial experts, and peers. Participants valued algorithmic advice more highly and relied on it as much as expert advice. This preference for algorithms - despite their similar or even...

In this study, we examine the critical question of whether global equity and bond assets (both green and non-green) offer effective hedging and safe haven properties against stock market risks in South Asia, with a focus on Bangladesh, India, Pakistan, and Sri Lanka. The increasing integration...

As a cornerstone of the modern financial safety net, the Lender of Last Resort (LOLR) is essential in mitigating liquidity crises and containing financial contagion. However, during periods of economic stability, risk-taking incentives in the banking sector may undermine its effectiveness. Using...

This WBG study examines what makes distressed asset markets work — and how governments can create the right conditions for private sector engagement. It provides policymakers, regulators, and financial institutions with a practical framework to assess market readiness, identify policy and...

We develop a novel sentiment measure derived from survey data to empirically vali date the Minsky-Kindleberger view on financial crises. Using survey data from multiple countries, we decompose beliefs into components explained by public information that are orthogonal to optimal machine beliefs,...

This paper revisits the "too much finance" hypothesis by reassessing the relationship between financial depth and economic growth using an expanded dataset (1960-2019) and a systematic estimation strategy that avoids reliance on any single, potentially arbitrary sample window. We estimate both...

Financial Conditions Indices (FCIs) are a widely used tool for assessing the broader monetary policy stance beyond the central bank's direct control. This paper presents a novel vector autoregressive (VAR) model that includes key macroeconomic variables and maps financial variables into a single...

Financial markets and foreign investments could play an effective role in determining the environment and income of GCC resource-rich economies. Therefore, the effects of Financial Market Development (FMD) and Foreign Direct Investment (FDI) on Carbon Intensity (CI) from oil, gas, gas flaring,...

Workforce adjustments, such as mass layoffs, are significant corporate events that can influence stock returns and volatility, yet their broader asset-pricing implications remain underexplored. We examine the impact of such workforce shocks on stock performance from an asset-pricing perspective....

This research explores the application of extreme value theory in modelling and quantifying tail risks across different economic equity markets, with focus on the Nairobi Securities Exchange (NSE20), the South African Equity Market (FTSE/JSE Top40) and the US Equity Index (S&P500). The study...

This paper examines the relevance of banks' exposure to climate transition risk in the interbank lending market. Using transaction-level data on repo agreements, we first establish that banks with higher exposure to transition risk face significantly higher borrowing costs. This premium is a...

Purpose - This study aims to forecast the stock market behavior of BRICS nations (Brazil, Russia, India, China and South Africa) using advanced machine learning models. The focus is on identifying market trends, predicting future index prices and analyzing returns. Design/methodology/approach -...

The Financial Lobster Bias describes how SMEs, driven by distorted liquidity perceptions, engage in aggressive expansion until financial breakdown occurs. Using data from 10,412 Spanish SMEs (2000-2024), this study shows that liquidity misperception-measured through two versions of the Liquidity...

Cryptocurrencies play a central role in modern financial markets; however, geopolitical tensions and environmental concerns raise critical questions about their stability and informational efficiency. This study distinguishes between green cryptocurrencies (GCs), based on low-energy validation...

The smooth functioning of the repo market is essential to financial stability. However, the market has faced repeated episodes of stress in recent years. This paper examines the resilience of the euro-denominated repo market during recent episodes of elevated financial stress, drawing on...

Financial risk early warning systems are essential for proactive risk management in volatile markets, particularly for emerging economies such as China. This study develops a hybrid deep learning model integrating Convolutional Neural Networks (CNNs), Long Short-Term Memory (LSTM), and Gated...