The effect of cyberattacks on European financial institutions: An event study approach

This paper investigates how cyberattacks affect the market valuation of European financial institutions. Using an event study methodology on a sample of 31 cyber incidents affecting European financial firms between 2016 and 2024, we document a clear and statistically significant negative market reaction concentrated on the announcement day. Importantly, we find no evidence of abnormal price movements prior to disclosure, which is inconsistent with systematic insider trading. In contrast to prior studies that report pre-announcement abnormal returns (ARs) around cyber incident disclosures, our findings suggest that information leakages and insider trading may be less of a concern in the European financial sector. A time-trend analysis reveals diverging patterns: while the impact of non-confidential attacks has intensified, the market response to confidentiality breaches has weakened, consistent with improved disclosure and crisis management practices.