Tracing Bank Runs in Real Time

Marco Cipriani, Thomas Eisenbach and Anna Kovner

No 24-10, Working Paper from Federal Reserve Bank of Richmond

Abstract: We use high-frequency interbank payments data to trace deposit flows in March 2023 and identify twenty-two banks that suffered a run, significantly more than the two that failed but fewer than the number that experienced large negative stock returns. The runs were driven by large (institutional) depositors, rather than many small (retail) depositors. While the runs were related to weak fundamentals, we find evidence for the importance of coordination because run banks were disproportionately publicly traded and many banks with similarly bad fundamentals did not suffer a run. Banks that survived a run did so by borrowing new funds and then raising deposit rates, not by selling liquid securities.

Keywords: bank runs; payments; coordination; public signals (search for similar items in EconPapers)
JEL-codes: E41 E58 G01 G21 G28 (search for similar items in EconPapers)
Pages: 48
Date: 2024-09
New Economics Papers: this item is included in nep-ban, nep-inv and nep-mon
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Working Paper: Tracing Bank Runs in Real Time (2024)
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DOI: 10.21144/wp24-10

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