Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298430 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 9/2022
Publisher: 
Norges Bank, Oslo
Abstract: 
We study the dividend payouts of U.S. banks during the 2008 financial crisis. Using a difference-in-differences methodology, we shows that banks with higher share of short-term liabilities to total liabilities, which were thus more exposed to the rollover crisis that took place in 2008, increased their dividend payouts relative to less exposed banks. This relative increase in dividend payouts is concentrated in relatively cash-rich banks. The dividend payout increase was associated with a short-run increase in stock valuations. We argue that this front-loading of dividends of more exposed banks is consistent with a theory of dividend payouts, in which the payout policy has a (short-run) stabilizing role on the bank's liquidity position by signaling information to short-term lenders about the bank's available liquidity.
Subjects: 
payout policies
dividend signaling
rollover crises
bank runs
liquidity crises
JEL: 
G01
G21
G35
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-250-8
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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