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Understanding bank-run contagion

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  • Brown, Martin
  • Trautmann, Stefan T.
  • Vlahu, Razvan

Abstract

We study experimental coordination games to examine through which transmission channels, and under which information conditions, a panic-based depositor-run at one bank may trigger a panic-based depositor-run at another bank. We find that withdrawals at one bank trigger withdrawals at another bank by increasing players JEL Classification: D81, G21, G28

Suggested Citation

  • Brown, Martin & Trautmann, Stefan T. & Vlahu, Razvan, 2014. "Understanding bank-run contagion," Working Paper Series 1711, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20141711
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    References listed on IDEAS

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    Cited by:

    1. Douglas D. Davis & Robert J. Reilly, 2016. "On Freezing Depositor Funds at Financially Distressed Banks: An Experimental Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(5), pages 989-1017, August.
    2. repec:eee:ecolet:v:162:y:2018:i:c:p:146-149 is not listed on IDEAS
    3. Oana Peia & Radu Vranceanu, 2017. "Experimental evidence on bank runs under partial deposit insurance," Working Papers hal-01510692, HAL.
    4. Kiss, Hubert J. & Rodriguez-Lara, Ismael & Rosa-Garcia, Alfonso, 2018. "Panic bank runs," Economics Letters, Elsevier, vol. 162(C), pages 146-149.
      • Hubert Janos Kiss & Ismael Rodriguez-Lara & Alfonso Rosa-Garcia, 2017. "Panic bank runs," IEHAS Discussion Papers 1710, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

    More about this item

    Keywords

    bank runs; contagion; systemic risk;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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