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Understanding bank-run contagion

Author

Listed:
  • Brown, Martin
  • Trautmann, Stefan T.
  • Vlahu, Razvan
Abstract
We study experimental coordination games to examine through which transmission channels, and under which information conditions, a panic-based depositor-run at one bank may trigger a panic-based depositor-run at another bank. We find that withdrawals at one bank trigger withdrawals at another bank by increasing players JEL Classification: D81, G21, G28

Suggested Citation

  • Brown, Martin & Trautmann, Stefan T. & Vlahu, Razvan, 2014. "Understanding bank-run contagion," Working Paper Series 1711, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20141711
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    More about this item

    Keywords

    bank runs; contagion; systemic risk;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • 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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