Short Selling and Bank Deposit Flows

Mark Carey and Christopher Healy

No 24-05, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Some observers have argued that the short selling of bank stock contributes to bank runs and bank failures. Previously, no evidence has been available. We find no evidence that more short selling of bank stock is associated with materially larger outflows of bank deposits. We believe this means that proposals to restrict the short selling of bank stock should be supported by other arguments.

Keywords: short-selling; bank runs; bank deposits (search for similar items in EconPapers)
JEL-codes: G01 G12 G18 G21 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2024-02-08
New Economics Papers: this item is included in nep-ban and nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwq:97870

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DOI: 10.26509/frbc-wp-202405

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