Information Management in Times of Crisis
31 Pages Posted: 18 Jun 2020
Date Written: February 2020
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 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