Research Project

Abstract

The research study evaluated the case of Covid-19 and its impact on the market risk of the European bank. The Covid pandemic is the third most important crisis that European credit institutions had to face after the global financial crises and Brexit. The uncertainties created by the past economic and political events had not been completely resolved and for this reason, the Covid-19 pandemic had a significant impact on the market participants. The effect was more profoundly observed in the case of share prices of the European banks. The research study, therefore, focused on this aspect in detail. In order to conduct the study, European banks and credit institutions were selected from different European countries. The objective was to evaluate the change in market risk in the pre and post-Covid periods. The research at the same time also aimed to evaluate the variables that should be considered to evaluate the market risk. The study was based on secondary data and conducted a quantitative analysis. The results provided quite insightful information on the impact of Covid on the European banks. The results showed that the market had significantly increased in the post covid period for almost all of the European banks. Abrupt movements in the share price of European banks were witnessed that had severely increased the risk for investors. At the same time, the measures adopted by the governmental, legislative, and banking institutions supported the banking industry of Europe to avoid insolvencies and bank failures. In recommendations for future research, it is suggested to collect primary data so that experts' opinions and views of the direct stakeholders could also be incorporated in the research. Keywords: Market risk, Covid-19, Value at Risk model, European banks