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Old-Fashioned Deposit Runs

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Abstract

This paper characterizes the deposit runs that occurred in the commercial banking system during 2008 and compares them with deposit runs during the 1930s. The importance of withdrawals by large depositors is a strong source of continuity across the two eras and reflects the longstanding concentration of deposit holdings. Runs occurred during 2008 despite the presence of national deposit insurance, which does not fully cover large accounts and therefore has limited impact on the incentives of those account holders. Large depositors continue to represent a source of both market discipline and financial instability.

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  • Rose, Jonathan D., 2015. "Old-Fashioned Deposit Runs," Finance and Economics Discussion Series 2015-111, Board of Governors of the Federal Reserve System (US).
  • Handle: RePEc:fip:fedgfe:2015-111
    DOI: 0.17016/FEDS.2015.111
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    File URL: http://www.federalreserve.gov/econresdata/feds/2015/files/2015111pap.pdf
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    File URL: http://dx.doi.org/10.17016/FEDS.2015.111
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    1. Acharya, Viral V & Mora, Nada, 2011. "Are Banks Passive Liquidity Backstops? Deposit Rates and Flows during the 2007-2009 Crisis," CEPR Discussion Papers 8706, C.E.P.R. Discussion Papers.
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    5. Gorton, Gary & Metrick, Andrew, 2012. "Securitized banking and the run on repo," Journal of Financial Economics, Elsevier, vol. 104(3), pages 425-451.
    6. Andrew Davenport & Kathleen McDill, 2006. "The Depositor Behind the Discipline: A Micro-Level Case Study of Hamilton Bank," Journal of Financial Services Research, Springer;Western Finance Association, vol. 30(1), pages 93-109, August.
    7. William L. Silber, 2009. "Why did FDR's bank holiday succeed?," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 19-30.
    8. Hyun Song Shin, 2009. "Reflections on Northern Rock: The Bank Run That Heralded the Global Financial Crisis," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 101-119, Winter.
    9. Michael D. Bordo & Claudia Goldin & Eugene N. White, 1998. "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century," NBER Books, National Bureau of Economic Research, Inc, number bord98-1.
    10. Ó Gráda, Cormac & White, Eugene N., 2003. "The Panics of 1854 and 1857: A View from the Emigrant Industrial Savings Bank," The Journal of Economic History, Cambridge University Press, vol. 63(1), pages 213-240, March.
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    1. repec:eee:finsta:v:41:y:2019:i:c:p:91-104 is not listed on IDEAS

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