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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in WO R K I N G PA P E R S E R I E S N O. 3 9 4 / S E P T E M B E R C O N T E N T S Abstract 4Non-technical summary 5

In this paper, we develop a model in the spirit of Diamond and Dybvig (J Polit Econ 91(3): [401][402][403][404][405][406][407][408][409][410][411][412][413][414][415][416][417][418][419] 1983), with bank-specific sequential-service constraints and commitment to a redistribution policy at the terminal date. In the good equilibrium, some insurance is provided against the risk of being affiliated with a bank with too many impatient depositors. We also find, however, that an unpleasant arithmetic takes place in a bad equilibrium, with patient depositors realizing they can be heavily taxed since runs are reducing savings in other banks, which in turn changes the ability of their own bank to induce truth-telling. We prove that even the disclosure device proposed by Green and Lin (J Econ Theory 109(1):1-23, 2003) may not remove bank-run equilibria. Keywords Sequential service • Deposit insurance • Green-Lin modelThis paper was presented at the SAET 2016 meeting and the conference Liquidity, Market Frictions and the Economy, at the Bank of France, in Paris (June 2016), under the title 'Unifying bank-run theories and (the trap of) financial integration'. We thank seminar participants for helpful comments, specially Régis Breton and Neil Wallace (who suggested the new title). The usual disclaim applies. Cavalcanti and Monteiro acknowledge financial support from CNPq-Brazil.

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Sequential service in the banking sector, as modeled by Diamond and Dybvig (1983), is a barrier to full insurance and potential source of financial fragility against which deposit insurance is infeasible (Wallace, 1988). In this paper, we pursue a different perspective, viewing the sequence of contacts as opportunities to extract information through a larger message space with commitment to richer promises. As we show, if preferences satisfy a separating property then the desired elimination of dominated strategies (Green and Lin, 2003) occurs even when shocks are correlated. In this manner the sequential service promotes stability. * We thank Carlos da Costa for helpful discussions and Jefferson Bertolai for his skilful research assistance.