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
Do you have a job opening that you would like to promote on SSRN?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.