We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
EVALUATING THEORIES OF BANK RUNS WITH HETEROGENEITY RESTRICTIONS.
- Authors
Graeve, Ferre; Karas, Alexei
- Abstract
This paper empirically tests theories of bank runs. We use a structural panel VAR to extract runs from deposit market data. Identification exploits cross-sectional heterogeneity in deposit insurance: we identify bank runs as adverse deposit market supply shocks hitting uninsured banks harder compared to insured. Conditional on a run, we study the behavior of uninsured banks with bad and good fundamentals. We find that both experience runs, but deposit outflows at the former are more severe. Panic effects, which affect all uninsured deposits alike, irrespective of fundamentals, dominate in the aggregate. Insured banks partially absorb the outflow of uninsured deposits.
- Subjects
BANKING industry; EMPIRICAL research; BANK deposits; DATA analysis; SUPPLY &; demand; BANK insurance
- Publication
Journal of the European Economic Association, 2014, Vol 12, Issue 4, p969
- ISSN
1542-4766
- Publication type
Article
- DOI
10.1111/jeea.12080