No. 729 - The impact of the war in Ukraine on energy prices: consequences for firms' financial performance

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by Fabrizio Ferriani and Andrea GazzaniNovember 2022

The study analyses the impact of the energy costs increases caused by the war in Ukraine on equity returns and on premiums paid on credit default swap (CDS) contracts for European companies included in the Eurostoxx 600 market index.

The study shows that companies with higher energy intensity and emission intensity have been more penalized by the markets, with greater falls in equity prices and increases in CDS premiums than other companies. A stress test methodology is also proposed to assess the evolution of firms' creditworthiness in relation to energy prices.