In search of a safe haven in times of turbulence: Effects of First Republic Bank failure on global asset markets

Haitham Nobanee; Philip Anthony Hamill; Wajahat Azmi; Dipanwita Chakraborty; Xuan-Hoa Nghiem

doi:10.1016/j.heliyon.2023.e20399

In search of a safe haven in times of turbulence: Effects of First Republic Bank failure on global asset markets

Heliyon. 2023 Oct 3;9(10):e20399. doi: 10.1016/j.heliyon.2023.e20399. eCollection 2023 Oct.

Authors

Haitham Nobanee^{1

2

3}, Philip Anthony Hamill¹, Wajahat Azmi⁴, Dipanwita Chakraborty^{5

6}, Xuan-Hoa Nghiem⁷

Affiliations

¹ College of Business, Abu Dhabi University, United Arab Emirates.
² Oxford Centre for Islamic Studies, University of Oxford, United Kingdom.
³ Faculty of Humanities & Social Sciences, The University of Liverpool, United Kingdom.
⁴ Thiagarajar School of Management, India.
⁵ Jagan Institute of Management Studies, India.
⁶ Indian Institute of Technology Kharagpur, India.
⁷ International School, Vietnam National University, Hanoi, Viet Nam.

Abstract

The failure of First Republic Bank (FRB) - the largest bankruptcy in the US banking system since the GFC - may send chilling effects through different asset markets in the US and even worldwide. This paper aims to clarify the effects of FRB failure on several assets and figure out potential safe havens for investors during the 2023 US banking turmoil. Results from the event study approach reveal that eleven particular assets are relatively safe during the current turbulence. Several important implications are made for investors, portfolio managers, and policymakers.

Keywords: Assets markets; Bank failure; Event study; Safe havens.