2018-04-28T11:11:25Z

2018-04-28

Default License

Returns

Cyprus

Volume

masterThesis

Finance

Monetary policy

free

School of Economics, Business Administration and Legal Studies, MSc in Banking and Finance

This dissertation was written as part of the MSc in Banking and Finance at the International Hellenic University. Capital Controls regulate capital flows to and from an economy, a phenomenon found in financial crises and turmoils. The global financial crisis and banking collapse affected many countries, and governments were forced to use capital controls, a fact that is still ongoing in some countries like Greece. Thus, there are not many papers about the outcomes of the capital controls' implementation in the previous years. Research concerning the repurcussions of the recent capital controls' policy is a growing field, trying to identify whether capital controls affect economies in a negative or a positive way. In this research, we try to examine the impact of capital controls on the stock market of Greece, Cyprus and Russia. The behavior of the markets and the reaction of the investors before and after the announcement of the capital controls are investigated, by analyzing the returns and volume of transactions, approximately one year before and one year after the introduction of the capital controls. The general indices and the big capitalization indices are studied for the aforementioned periods. In particular, our findings showed increased volatility in returns and volume for all indices after the capital controls and a mere stability in returns for all countries under analysis. Volatility decreased significantly in Cyprus and Russia in contrast with Greece, where we detect an unexpected increase for both indices. In the aftermath of our research, we can conclude that capital controls have indeed a negative impact on the stock markets, however not to the extent that someone would expect.

Alexakis, Christos

Archontakis, Fragiskos

IHU

73

Cyprus