Understanding Bank Runs: The Importance of Depositor-Bank Relationships and Networks

S-Tier
Journal: American Economic Review
Year: 2012
Volume: 102
Issue: 4
Pages: 1414-45

Authors (2)

Rajkamal Iyer (not in RePEc) Manju Puri (Duke University)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We use unique depositor-level data for a bank that faced a run to understand the factors that affect depositor behavior. We find uninsured depositors are most likely to run. Deposit insurance helps, but is only partially effective. Bank-depositor relationships mitigate runs, suggesting that relationship with depositors help banks reduce fragility. In addition, we also find that social networks matter. Finally, we find long-term effects of a solvent bank run in that depositors who run do not return back to the bank. Our results help understand the underlying dynamics of bank runs and hold important policy implications. (JEL D12, G21, O16, Z13)

Technical Details

RePEc Handle
repec:aea:aecrev:v:102:y:2012:i:4:p:1414-45
Journal Field
General
Author Count
2
Added to Database
2026-01-29