**5. Conclusions**

Our study investigates the relationship between financial companies' stock prices and oil price using a sample of 76 financial companies headquartered in EU and included in the Forbes 2000 Ranking of the World's Largest Public Companies. The macroeconomic set of explanatory variables includes Brent crude oil prices, local stock market indices, EUR/USD exchange rate, oil imports dependency, HICP, VIX, and VSTOXX. We employ panel data as the base econometric model but also an ARDL specification that handles better cross-section specificities and provides a long-run versus a short-run perspective on financial companies' exposure to oil price risk. The investigation of the most important financial institutions in the European Union in terms of their stock price performance in relation to changes in oil prices and the application of the panel ARDL methodology are, in our opinion, the most important contributions we make to the debate that already exists in the literature. Thus, we provide financial institutions' managers with a better grasp of the risk triggers that influence their performance and point towards directions to improve the design of their hedging policies. Moreover, governments and authorities are o ffered an enlarged view over the links between macroeconomic risks and financial sector performance, which allows for ameliorated measures of economic policy that protect against shocks.

We find that financial companies headquartered in the European Union are ubiquitously exposed to oil price risk, but this exposure is a long-run one and comes hand in hand with the exposure of financial companies to real economy risk factors. Concurrently, the short-run exposure to oil price changes is less strong compared to the long-run exposure and bears specificities across companies, financial services industries, and countries. Moreover, our results sugges<sup>t</sup> that market investors, although displaying a speculation-driven behavior over the short-term, adjust their risk premiums and valuation of financial companies' stock prices and returns over the long-run in order to incorporate macroeconomic risk circumstances.

Overall, our research reinforces the previous findings on the fundamental role of financial companies for the EU financial stability and highlights their relevance as transmitters of economic shocks, even outside the traditional financial landscape. At the same time, oil price is able to generate turbulences at economy-wide level, as long as even industries that are not oil producers and/or consumers display sensitivities to its fluctuations. These findings open several avenues for future research. One possible direction refers to the inclusion in our estimations of the non-oil energy sources, given the increase consumption of renewable primary energy in the European Union. An extension of our study to the most important EU companies from other industries is another possible line of future research, coupled with the inclusion of similar companies from other countries, in order to examine the robustness of our findings at an international level. As well, more sophisticated methodologies may be employed with the aim of providing further reliability to our estimates and of consolidating the knowledge on the exposure of the various economic sectors to risk sources.

**Author Contributions:** The authors contributed equally to this work.

**Funding:** This research received no external funding.

**Conflicts of Interest:** The authors declare no conflict of interest.
