Tracing Bank Runs in Real Time

49 Pages Posted: 21 May 2024 Last revised: 21 Dec 2024

See all articles by Marco Cipriani

Marco Cipriani

Federal Reserve Bank of New York

Thomas M. Eisenbach

Federal Reserve Banks - Federal Reserve Bank of New York

Anna Kovner

Federal Reserve Banks - Federal Reserve Bank of Richmond

Multiple version iconThere are 2 versions of this paper

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

Cipriani, Marco and Eisenbach, Thomas M. and Kovner, Anna, Tracing Bank Runs in Real Time (May 1, 2024). FRB of New York Staff Report No. 1104, Rev. December 2024, https://doi.org/10.59576/sr.1104, Available at SSRN: https://ssrn.com/abstract=4834983 or http://dx.doi.org/10.2139/ssrn.4834983

Marco Cipriani (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Thomas M. Eisenbach

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-6089 (Phone)

HOME PAGE: http://teisenbach.github.io/

Anna Kovner

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

P.O. Box 27622
Richmond, VA 23261
United States

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