Should bank runs be prevented?
نویسندگان
چکیده
منابع مشابه
How Should Bank Liquidity be Regulated?*
Before the crisis, bank regulation relied to a large extent on capital regulation. Liquidity regulation was not widely used. The liquidity problems during the crisis led to calls for liquidity regulation. As a result, the Basel III accord introduced global liquidity standards. An important issue in the construction of such liquidity regulations is the exact nature of the problem they are trying...
متن کاملAre Bank Runs Contagious ?
Banks are a vital part of the economy because they provide an important channel through which many businesses get their financing. However, as we know from the history of the United States and other countries, banks can be subject to runs and panics. A panic that encompasses a large part of the banking system can seriously disrupt economic activity. During a run, a bank experiences much heavier...
متن کاملEquilibrium Bank Runs
We analyze a banking system in which the class of feasible deposit contracts, or mechanisms, is broad. The mechanisms must satisfy a sequential service constraint, but partial or full suspension of convertibility is allowed. Consumers must be willing to deposit, ex ante. We show, by examples, that under the socalled “optimal contract,” the post-deposit game can have a run equilibrium. Given a p...
متن کاملEquilibrium Bank Runs Revisited
In a Diamond and Dybvig (1983) environment, Green and Lin (2003) take a mechanism design approach and show that a bank run equilibrium cannot exist. Peck and Shell (2003) generalize their economic environment and show that it can. The bank run, however, does not emerge because of modifications to the economic environment but rather because the mechanism that implements allocations is not an opt...
متن کاملHerding and bank runs
Traditional models of bank runs do not allow for herding e¤ects, because in these models withdrawal decisions are assumed to be made simultaneously. I extend the banking model to allow a depositor to choose his withdrawal time. When he withdraws depends on his consumption type (patient or impatient), his private, noisy signal about the quality of the banks portfolio, and the withdrawal histori...
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ژورنال
عنوان ژورنال: Journal of Banking & Finance
سال: 2003
ISSN: 0378-4266
DOI: 10.1016/s0378-4266(02)00243-1