Exogenous Shocks, Deposit Runs and Bank Soundness: A Macroeconomic Framework
Posted: 31 Jan 1998
Abstract
In a model where all banks are initially solvent, an exogenous shock affects confidence, causing a flight from deposits into domestic and foreign currency. Real interest rates increase unexpectedly affecting firms and raising the share of the banks' nonperforming assets. This increase causes genuine solvency problems and accelerates the bank run.
JEL Classification: D58, E42, G21
Suggested Citation: Suggested Citation
Blejer, Mario I. and Feldman, Ernesto V. and Feltenstein, Andrew, Exogenous Shocks, Deposit Runs and Bank Soundness: A Macroeconomic Framework. Available at SSRN: https://ssrn.com/abstract=56247
Andrew Feltenstein (Contact Author)
Georgia State University - Department of Economics ( email )
P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-4130093 (Phone)
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