A Tale of Two Runs: Depositor Responses to Bank Solvency Risk

To stay or go? Consumer bank switching behaviour after government interventions

“…They document heterogeneity in withdrawals across account types. Iyer et al (2016) show that certain depositors are more likely to run than others and therefore the fragility of the bank is affected by the depositor base. By studying a low and high solvency risk shock to the same bank, the authors conclude that the nature of the shock shapes customer responses.…”

“…Brown et al, 2016;Hasan et al, 2013;Van der Cruijsen et al, 2012). Second, we relate to work on consumer switching behaviour and bank runs (Iyer et al, 2016;Iyer and Puri, 2012;Van der Cruijsen and Diepstraten, 2015;Kiser, 2002).…”

Unintended Consequences of Unemployment Insurance Benefits: The Role of Banks

“…4 The empirical strand of this literature offers evidence that both bank fundamentals and panics may lead to deposit outflows. (Iyer and Puri, 2012;Iyer, Puri, and Ryan, 2016;Mason, 1997, 2003).…”

Would depositors pay to show that they do not withdraw? Theory and experiment

“…Empirical studies show that depositors' choices are sometimes observable and affect subsequent depositors' decisions. Grada and Kelly (2000), Iyer and Puri (2012), Iyer et al (2016) and Atmaca et al (2017) study observability in one's social network or neighborhood: observing that others withdraw (keep their funds deposited) increases (decreases) the likelihood of withdrawal. These studies suggest also that depositors observe withdrawals more broadly than holding funds in the bank.…”