Tracing Bank Runs in Real Time
49 Pages Posted: 21 May 2024 Last revised: 21 Dec 2024
There are 2 versions of this paper
Tracing Bank Runs in Real Time
Tracing Bank Runs in Real Time
Date Written: May 1, 2024
Abstract
We use high-frequency interbank payments data to trace deposit flows in March 2023 and identify twenty-two banks that suffered a run, significantly more than the two that failed but fewer than the number that experienced large negative stock returns. The runs were driven by a small number of large depositors and were related to weak fundamentals. However, we find evidence for the importance of coordination because run banks were disproportionately publicly traded and many banks with similarly bad fundamentals did not suffer a run. Banks survived the run by borrowing new funds and raising deposit rates, not by selling securities.
Keywords: bank runs, payments, coordination, public signals
JEL Classification: E41, E58, G01, G21, G28
Suggested Citation: Suggested Citation