Two Centuries of Systemic Bank Runs

Rustam Jamilov, König, Tobias, Müller, Karsten and Farzad Saidi
Authors registered in the RePEc Author Service: Karsten Müller and Tobias König

No 19382, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Bank runs are a central concern for financial stability, yet systematic empirical evidence remains scarce. We construct a novel historical dataset of bank runs, covering 184 countries since 1800 by combining narrative evidence from 503 sources with statistical indicators of aggregate deposit contractions. We find that: (i) the unconditional likelihood of a bank run is 1.9%; (ii) systemic runs---those accompanied by aggregate deposit outflows---are associated with output losses of 9% over five years, more than after non-systemic runs or deposit contractions alone; (iii) these losses persist even when banks are well capitalized and there is no evidence of fundamental triggers, banking crises, or widespread bank failures; (iv) central banks and deposit insurance are linked to a lower probability of runs becoming systemic, while liability guarantees coincide with smaller output losses. Our findings highlight a key role of bank liability disruptions in economic fluctuations, over and above solvency issues.

Keywords: Bank runs; Banking crises; Sunspots (search for similar items in EconPapers)
JEL-codes: E44 G01 G20 G21 G28 N20 (search for similar items in EconPapers)
Date: 2024-08
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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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