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Depositor Responses to a Banking Crisis: Are Finance Professionals Special?

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Abstract
We use a conjoint analysis of 551 subjects to compare the reaction of finance professionals to news of a banking crisis with the reactions of non-finance professionals and graduate students. All three groups make greater deposit withdrawals if deposit insurance protection involves a haircut, but the response of finance professionals is more nuanced: compared to non-finance professionals and students, they seem to care about haircuts mainly when bank capitalization is low and less so when capitalization is high. Both finance and nonfinance professionals are more concerned about the pre-funding of deposit insurance than are students. Overall though, the greater banking sector knowledge and experience presumably possessed by finance professionals does not seem to automatically translate into significantly different crisis-response behavior.

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  • Glenn Boyle & Roger Stover & Amrit Tiwana & Oleksandr Zhylyevskyy, 2022. "Depositor Responses to a Banking Crisis: Are Finance Professionals Special?," Working Papers in Economics 22/03, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:22/03
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    More about this item

    Keywords

    Banking crisis; Finance professionals; Deposit withdrawals;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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