Trademarks in Banking

Ryuichiro Izumi, Antonis Kotidis and Paul Soto
Additional contact information
Antonis Kotidis: Federal Reserve Board
Paul Soto: Federal Reserve Board

No 2024-004, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: One in five banks in the United States share a similar name. This can increase the likelihood of confusion among customers in the event of an idiosyncratic shock to a similarly named bank. We find that banks that share their name with a failed bank experience a half percent drop in transaction deposits relative to banks with similar characteristics but different name. This effect doubles for failures that are covered in media. We rationalize our findings via a model of financial contagion without fundamental linkages. Our model explains that when distinguishing banks is more costly due to similar trademarks, depositors are more likely to confuse their banks’ condition resulting in financial contagion.

Keywords: Trademarks; Banking; Bank Runs; Bank Failures (search for similar items in EconPapers)
JEL-codes: G14 G21 G30 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2024-05
New Economics Papers: this item is included in nep-ban and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Trademarks in Banking (2024)
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