Bank Runs With and Without Bank Failure

We study the causes and consequences of bank runs using a novel dataset of bank runs in the United States from 1863 to 1934. Applying large language models to historical newspapers, we identify 3,421 runs on individual banks. The resulting series aligns closely with narrative chronologies of U.S. banking crises and provides rich new micro-level information on runs. Runs are considerably more likely in weak banks but also occur in strong banks, especially in response to negative news about the real economy or the broader banking system. However, runs typically result in failure only for banks with poor fundamentals. Strong banks survive runs through various mechanisms, including interbank cooperation and suspension of convertibility. At the local level, runs on banks with poor fundamentals translate into substantially larger declines in deposits, lending, and manufacturing activity than runs on strong banks. Our findings imply that poor fundamentals are central to explaining both when runs occur and when they have severe economic effects, tempering the view that small shocks can generate discontinuous jumps to bad equilibria through self-fulfilling run dynamics.