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“Honey, the Bank Might Go Bust”: The Response of Finance Professionals to a Banking System Shock

Glenn Boyle (), Roger Stover, Amrit Tiwana and Oleksandr Zhylyevskyy ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: How do informed depositors respond to a banking crisis? To shed light on this question, we apply conjoint analysis to a sample of 417 finance professionals from six countries. For a range of bank accounts that differ in the type and level of depositor protection that they offer, we ask each participant to indicate how they would respond to a banking system shock that could potentially affect their own bank. We find that intended withdrawal rates depend only on account profile attributes and are independent of respondent characteristics and respondent expectations about deposit interest rate changes. The most important account attributes are the existence of a formal deposit insurance fund and the fraction of the deposit at risk (particularly for under-capitalized banks).

Keywords: finance professionals; banking crisis; conjoint analysis, deposit insurance (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-11-14
New Economics Papers: this item is included in nep-ban and nep-rmg
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