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Crises and confidence: Systemic banking crises and depositor behavior

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  • Osili, Una Okonkwo
  • Paulson, Anna
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    Abstract

    We show that individuals who have experienced a systemic banking crisis are 11 percentage points less likely to use banks in the U.S. than otherwise similar individuals who emigrated from the same country but did not live through a crisis. This finding is robust to controlling for exposure to other macroeconomic events and to various methods for addressing potential bias due to migrant self-selection. Consistent with the view that personal experience plays an important role in decision-making, the effects are larger for individuals who were older and more likely to have had wealth entrusted to the banking system at the time of the crisis and for people who experienced crises in countries without deposit insurance.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0304405X13002791
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 111 (2014)
    Issue (Month): 3 ()
    Pages: 646-660

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    Handle: RePEc:eee:jfinec:v:111:y:2014:i:3:p:646-660

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    Web page: http://www.elsevier.com/locate/inca/505576

    Related research

    Keywords: Systemic banking crises; Confidence; Deposit insurance; Reinforcement learning; Immigrants;

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    References

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