Two Centuries of Systemic Bank Runs

Rustam Jamilov (), Tobias König, Karsten Müller and Farzad Saidi ()
Additional contact information
Rustam Jamilov: University of Oxford
Farzad Saidi: University of Bonn & CEPR

No 333, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We study bank runs using a novel historical cross-country dataset that covers 184 countries over the past 200 years and combines a new narrative chronology with statistical indicators of bank deposit withdrawals. We document the following facts: (i) the unconditional likelihood of a bank run is 1.2% and that of significant deposit withdrawals 12.7%; (ii) systemic bank runs, i.e. those that are accompanied by deposit withdrawals, are associated with substantially larger output losses than non-systemic runs or deposit contractions alone; (iii) bank runs are contractionary even when they are not triggered by fundamental causes, banks are well-capitalized, and there is no evidence of a crisis or widespread failures in the banking sector; (iv) in historical and contemporary episodes, depositors tend to run on highly leveraged banks, causing a credit crunch, and a reallocation of deposits across banks; and (v) liability guarantees are associated with lower output losses after systemic runs, while having a lender of last resort or deposit insurance reduces the probability of a run becoming systemic. Taken together, our findings highlight a key role for sudden bank liability disruptions over and above other sources of financial fragility.

Keywords: bank runs; financial fragility; deposits; financial crises (search for similar items in EconPapers)
JEL-codes: E44 E58 G01 G21 G28 (search for similar items in EconPapers)
Pages: 263 pages
Date: 2024-08
New Economics Papers: this item is included in nep-his, nep-mon and nep-sea
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Citations: View citations in EconPapers (1)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_333_2024.pdf First version, 2024 (application/pdf)

Related works:
Working Paper: Two Centuries of Systemic Bank Runs (2024)
Working Paper: Two Centuries of Systemic Bank Runs (2024)
Working Paper: Two Centuries of Systemic Bank Runs (2024)
Working Paper: Two Centuries of Systemic Bank Runs (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:333

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