On risk and market sentiments driving financial share price dynamics

Abstract The goal is to investigate the dynamics of banks’ share prices and related financials that lead potential disruptions credit economy. We adopt a classic macroeconomic equilibrium model with households, banks, non-financial companies explain both market valuations endogenous debt constraints in terms risk. Heterogeneous ranging from cycles chaos are illustrated. Deposits equity proven be management levers for control/anticontrol, only feasible unstable. Finally, using real-world data, test conducted on suggested proving our framework conforms well reality.