Understanding bank runs: The importance of depositor-bank relationships and networks
Publication
, Journal Article
Iyer, R; Puri, M
Published in: American Economic Review
June 1, 2012
We use unique depositor-level data for a bank that faced a run to understand the factors that affect depositor behavior. We find uninsured depositors are most likely to run. Deposit insurance helps, but is only partially effective. Bank-depositor relationships mitigate runs, suggesting that relationship with depositors help banks reduce fragility. In addition, we also find that social networks matter. Finally, we find long-term effects of a solvent bank run in that depositors who run do not return back to the bank. Our results help understand the underlying dynamics of bank runs and hold important policy implications.
Duke Scholars
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Published In
American Economic Review
DOI
ISSN
0002-8282
Publication Date
June 1, 2012
Volume
102
Issue
4
Start / End Page
1414 / 1445
Related Subject Headings
- Economics
- 38 Economics
- 35 Commerce, management, tourism and services
- 15 Commerce, Management, Tourism and Services
- 14 Economics
Citation
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Iyer, R., & Puri, M. (2012). Understanding bank runs: The importance of depositor-bank relationships and networks. American Economic Review, 102(4), 1414–1445. https://doi.org/10.1257/aer.102.4.1414
Iyer, R., and M. Puri. “Understanding bank runs: The importance of depositor-bank relationships and networks.” American Economic Review 102, no. 4 (June 1, 2012): 1414–45. https://doi.org/10.1257/aer.102.4.1414.
Iyer R, Puri M. Understanding bank runs: The importance of depositor-bank relationships and networks. American Economic Review. 2012 Jun 1;102(4):1414–45.
Iyer, R., and M. Puri. “Understanding bank runs: The importance of depositor-bank relationships and networks.” American Economic Review, vol. 102, no. 4, June 2012, pp. 1414–45. Scopus, doi:10.1257/aer.102.4.1414.
Iyer R, Puri M. Understanding bank runs: The importance of depositor-bank relationships and networks. American Economic Review. 2012 Jun 1;102(4):1414–1445.
Published In
American Economic Review
DOI
ISSN
0002-8282
Publication Date
June 1, 2012
Volume
102
Issue
4
Start / End Page
1414 / 1445
Related Subject Headings
- Economics
- 38 Economics
- 35 Commerce, management, tourism and services
- 15 Commerce, Management, Tourism and Services
- 14 Economics