Information Management in Times of Crisis
30 Pages Posted: 27 Dec 2019
Date Written: December 2019
How does information management and control affect bank stability? Following a national bank holiday in 1933, New York state bank regulators suspended the publication of balance sheets of state-charter banks for two years, whereas the national-charter bank regulator did not. We use this divergence in policies to examine how the suspension of bank-specific information affected depositors. We find that state-charter banks experienced significantly less deposit outflows than national-charter banks in 1933. However, the behavior of bank deposits across both types of banks converged in 1934 after the introduction of federal deposit insurance.
Keywords: information management, bank opacity, banking crisis, Great Depression, depositor confidence
JEL Classification: G21, G28, N22
Suggested Citation: Suggested Citation