Arbeitspapier
Savings, efficiency and the nature of bank runs
Does the level of deposits matter for bank fragility and efficiency? In a banking model with endogenous bank runs and a consumption-saving decision, we show that the level of deposits has opposite effects on bank fragility depending on the nature of bank runs. In an economy with panic-driven runs, higher deposits make banks less fragile, while the opposite is true when runs are only driven by fundamentals. The effect of deposits is not internalized by depositors. A saving externality arises, leading to excessive fragility and insufficient liquidity provision. The economy features under-saving when runs are panic driven, and over-saving when fundamental driven.
- ISBN
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978-92-899-4969-9
- Language
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Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 2636
- Classification
-
Wirtschaft
Financial Crises
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
- Subject
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endogenous bank runs
liquidity provision
fundamental runs
panic runs,saving externality
- Event
-
Geistige Schöpfung
- (who)
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Leonello, Agnese
Mendicino, Caterina
Panetti, Ettore
Porcellacchia, Davide
- Event
-
Veröffentlichung
- (who)
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European Central Bank (ECB)
- (where)
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Frankfurt a. M.
- (when)
-
2022
- DOI
-
doi:10.2866/209410
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Leonello, Agnese
- Mendicino, Caterina
- Panetti, Ettore
- Porcellacchia, Davide
- European Central Bank (ECB)
Time of origin
- 2022
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