Market discipline across bank governance models: Empirical evidence from German depositors

German savers are renowned for preferring safe, long-term investments, thus providing patient capital, with bank deposits playing an important role. Based on a unique data set for the period 2003–2012, thus covering the financial crisis, our empirical findings do not confirm this hypothesis but reveal instead that market discipline is prevalent throughout the entire period of observation. Hence, the financial crisis did not provoke major behavioral changes. Moreover, depositors’ alertness was not silenced by a government guarantee of all deposits issued after the Lehman collapse. However, the strength and type of market discipline vary across governance structures, with savings banks’ and cooperative banks’ depositors significantly more active than depositors with commercial banks.