Reevaluating Bank Price-to-Book Ratios: An In-Depth Analysis of Equity Components across Economic Cycles

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The paper covers a very important topic. The authors analyze 46 European banks from 2005 to 2020 and find that earnings related equity components significantly influence P/B ratios for European banks. The topic is of interest to academics as well as bankers. The analysis is also satisfactory.

i) However, the authors must include a include a table which compares these 46 banks with descriptive statistics of the MSCI World Bank Index and the S&P Bank Select Index. This will help the readers decipher the ratios better.

ii) In addition, the authors must improve the literature of post 2008 banking reforms in Europe. Several key papers are missing. 

iii) Similarly, the authors must expand on the post Covid banking literature. Key policy reforms for European banks will help.

Comments on the Quality of English Language

The language is satisfactory.

Author Response

Please see the attachment.

Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

Dear authors,

thank you for the interesting article, which is of great practical as well as academic interest. However, the paper can be improved:
-The introduction needs to be rewritten in a clearer order, at the moment it seems disjointed and sometimes repetitive. I recommend separating the introduction from the theoretical background, which does not seem to be present at the moment.
-The hypotheses should be anchored in a theory or a strong theoretical background and reformulated following the same structure.
-I suggest that you revise the paper because there are typos.
-You should justify why this sample and time frame was chosen, which does not seem to be up to date with recent years. I also suggest that you provide some robustness tests that can corroborate the results obtained.
-There does not seem to be a section referring to the final conclusions, implications and future research.
-It would be appropriate to update some of the cited sources and replace them with more recent ones.
-Finally, it would be useful to emphasise the overall research question, which currently appears to be very broad and unable to fully explain the contribution to the existing literature on this topic.

Thanks again and good luck!

Comments on the Quality of English Language

Dear authors, 

I suggest that you double-check some passages in the paper, as there are some typos or typos present (ex. line 73 or 87).

Thanks

Author Response

Please see the attachment.

Author Response File: Author Response.docx