Browsing by Author "Bui, Dien Giau"

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Do short sellers exploit risky business models of banks? Evidence from two banking crises
(2020-02-01)
Lin, Chih-Yung
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Bui, Dien Giau
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Lin, Tse-Chun
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資訊管理與財務金融系註：原資管所+財金所
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Department of Information Management and Finance
We find that changes in short interest predict banks' stock returns during two recent banking crises. Furthermore, before the 2007-2008 crisis, short interest increased more for banks with worse performance during the Long-Term Capital Management crisis of 1998. We also find that changes in short interest predicted banks' loan quality and default risk during the 2007-2008 crisis. The results are stronger for banks with higher levels of risk-taking. Overall, our findings indicate that short sellers were informed about the persistent risky business models of banks and shorted those banks before the 2007-2008 crisis. (C) 2019 Elsevier B.V. All rights reserved.
Short sellers and the failures of financial intermediaries
(2019-10-01)
Bui, Dien Giau
;
Lin, Chih-Yung
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Chris, Vaike
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資訊管理與財務金融系註：原資管所+財金所
;
Department of Information Management and Finance
This study examines whether short sellers can predict the failures of financial intermediaries. The sample consists of 2,457 financial intermediaries from 1990 to 2016. First, we show that short interest is positively correlated to the failures of financial intermediaries. Second, we construct two measures of abnormal short interest before a failure and find robust evidence that this interest is positively correlated to the failures. Our empirical results confirm that short sellers do predict the failures in financial intermediaries. Therefore, the trading information from short sellers could be a vital resource for the government to prevent the occurrence of financial instability. (C) 2019 Elsevier B.V. All rights reserved.