Who Sees What? Сorporate Deposit Flows During a Banking Crisis

50 Pages Posted: 20 Jun 2017 Last revised: 4 Feb 2019

See all articles by Lucy Chernykh

Lucy Chernykh

Clemson University

Sergey Mityakov

Florida State University - Department of Finance

Date Written: February 2, 2019

Abstract

We utilize high-frequency data to study heterogeneity in access to bank-level information by corporate depositors during a banking crisis. We examine a bank panic episode in Russia during Summer-2004 triggered by the Central Bank announcement to liquidate banks for suspicious operations. Our results support the presence of sophisticated market monitoring and discipline. Private information about bank risk is available to depositors with a strong business connection to the bank. Other depositors make withdrawals based on publicly-observable bank characteristics. All corporate depositors are susceptible to rumors floating around the banking community. However, those rumors reflect bank-risk fundamentals. Contagion effects seem to be limited.

Keywords: Bank panic, corporate depositors, bank-firm connections, market discipline, regulatory discipline

JEL Classification: G21, G38, H26

Suggested Citation

Chernykh, Lucy and Mityakov, Sergey, Who Sees What? Сorporate Deposit Flows During a Banking Crisis (February 2, 2019). Available at SSRN: https://ssrn.com/abstract=2989266 or http://dx.doi.org/10.2139/ssrn.2989266

Lucy Chernykh

Clemson University ( email )

School of Accountancy and Finance
Clemson, SC 29634
United States

Sergey Mityakov (Contact Author)

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States

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