Opinion: Why Do Bank Runs Happen?

Kartik Athreya

Econ Focus, 2023, vol. 23, issue 2Q, 32

Abstract: The first half of 2023 has reminded us once again that banks are not immune from failure. In early March, Silicon Valley Bank (SVB) suffered a run on deposits and quickly collapsed. Its closure was followed by the failure of Signature Bank, a smaller bank, two days later. And even more recently, regulators exerted considerable effort to arrange the sale of First Republic Bank to a larger bank. The Fed was responsible for supervising and regulating SVB, and it recently issued its report examining what went wrong. I encourage you to take a look.

Keywords: Bank supervision; bank runs; deposit insurance (search for similar items in EconPapers)
Date: 2023
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