A Catering Perspective of the Banking Sector Markets: Evidence from a Cross-Country Analysis

In this paper, we attempt to analyze and better apprehend the nature, structure and dynamics of connections between bank stock indices of different countries in G7 and BRIC regions during the outbreak of tremendous events. For this end, we apply the bi- and multi-variate wavelet method on banking sector indices during the period 1/1/2016 to 4/28/2023. The empirical findings show that the banking sector indices’ comovement between the US and other markets tends to change in both short- and long-term and depend on region/country. Such connections are highly affected by the outbreak of tremendous events (crisis/pandemic). In particular, the impact of the SVB collapse on such connections seems to be dissimilar among countries and regions. The findings could have insightful information for investors and portfolio managers and call for stronger emphasis on the suitable banking regulatory environment.