Matthias Pelster What Is the Impact of Financial Penalties on the Performance and Stock Returns of Banks?

Matthias Pelster is Professor of Finance at Paderborn University. He has previously held research positions at New York University, Leuphana University of Lüneburg and TU Dortmund. His research focuses on behavioral finance, risk management, and corporate finance.

Area of Research

Behavioral Finance, Risk Management, Corporate Finance

since 2020

Professor for Finance

University of Paderborn (Universität Paderborn)


Visiting Research Professor

Stern School of Business, New York University


Assistant Professor

University of Paderborn (Universität Paderborn)


Assistant Professor

Leuphana University, Lüneburg

Institute of Finance and Accounting


Post-doctoral Researcher

Center for Research on Education and School Development (IFS)

Chair of Finance


Research and Teaching Fellow

Center for Research on Education and School Development (IFS)

Chair of Finance



University of Paderborn (Universität Paderborn)

Field of Expertise: Business Administration


Ph.D. in Finance

Center for Research on Education and School Development (IFS)

Chair for Finance, summa cum laude


Diploma in Mathematics and Business Administration

Center for Research on Education and School Development (IFS)

- Journal of Banking & Finance

- Journal of Risk and Insurance

- Journal of Empirical Finance

- Journal of Economic Behavior & Organization

- Journal of Behavioral and Experimental Finance

- German Finance Association

- European Finance Association

- American Finance Association

- Financial Management Association


- Best Paper Award, European Academy of Management Annual Conference (2019)

- Dean’s Young Scholar Research Award, Faculty of Business Administration and Economics, Paderborn University (2019)

- Academy of Science and Art NRW, Shortlisted for the “Junge Kolleg” (2018)

- Heinz Sauermann Advancement Award for Experimental Economic Research (2018)


- Berkley Fellowship: St. John’s School of Risk Management, The Peter J. Tobin College of Business, St. John’s University (2017)

- Project: “Managerial personality traits and selective hedging”, The Frankfurt Institute for Risk Management and Regulation (FIRM), (2020)

- DFG: Project “Social interactions and (financial) decision-making” (2020)

- Project: “Attention triggers and retail investor trading”, Fritz Thyssen Stiftung (2019)

- Project: “Social Trading and the Wisdom of the Crowd”, Fritz Thyssen Stiftung (2016 - 2017)

Opinions on the impact of financial penalties on the profitability of banks are divided: One view argues that they obstruct the functioning of the banking sector; another one says that these penalties are simply another cost of doing business. MATTHIAS PELSTER and his research group have investigated the impact of penalties on the performance of banks in an empirical study in order to properly differentiate between the competing opinions. They examined the profitability and the stock returns of a sample of large internationally listed banks that were imposed with financial penalties. They found that there is a negative relation between penalties and pre-tax profitability and a lower income in the years following the penalty. However, taking a look at the stock performance of these banks, they could detect a positive relation of the stock returns to the announcement of penalties.

LT Video Publication DOI:

Financial Penalties and Bank Performance

  • Hannes Köster and Matthias Pelster
  • Journal of Banking and Finance
  • Published in 2017
Hannes Köster and Matthias Pelster. "Financial Penalties and Bank Performance." Journal of Banking and Finance 79 (2017): 57-73.