Faster Bank Runs

21 Pages Posted: 11 Oct 2023 Last revised: 7 May 2024

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: May 7, 2024


Bank depositors now have access to instant (real-time) money transfer and payment services. Therefore, in events such as bank runs, depositors are able to drain their bank account faster than ever before. In addition, the increased use of social media accelerates the spread of bank run information. This article analyzes the policy implications of ``faster" bank runs on the optimal liquidity that banks must maintain. If the bailout is fast (as measured from the start of the run), liquidity requirement should increase with the speed of the run. Otherwise, optimal liquidity requirement is unaffected by the speed of the run.

Keywords: Faster bank runs, instant money transfers, liquidity requirement, bailout response time, digital banking.

JEL Classification: G21, G28.

Suggested Citation

Shy, Oz, Faster Bank Runs (May 7, 2024). Available at SSRN: or

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States


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