Template-Type: ReDIF-Article 1.0

Author-Name: Hubert János Kiss
Author-Workplace-Name: Hungarian Academy of Sciences
Author-Email: kiss.hubert.janos@krtk.mta.hu
Author-Person: pki288

Title: Depositors’ Behaviour in Times of Mass Deposit Withdrawals

Abstract: Based on empirical and experimental data, the study provides an overview of the
literature on the behaviour of depositors. On this basis, it establishes that depositors’
decisions and thus the phenomenon of mass deposit withdrawals can be explained
by fundamental problems as well as coordination among depositors. It points out
that depositors’ heterogeneity matters, and the impact of individual characteristics
depends on the existence of fundamental problems. Characteristics (such as
education, financial sophistication, wealth, bank experience and connections) that
make it likely that a depositor collects information on the bank reduce the chance
of mass deposit withdrawal in the absence of fundamental problems, but increase
the chance of mass deposit withdrawal in the case of such problems. The effect
of social networks (and of the information flowing through such) also matters.
Deposit insurance reduces the probability of bank runs, but is unable to eliminate
them completely. Experimental findings are also in line with empirical experiences.

Classification-JEL: C91, D8, G4, G21
Keywords: bank run, depositor’s decision, empirical data, experiment, panic
Pages: 95-111
Volume: 17
Issue: 4
Year: 2018
File-URL: http://english.hitelintezetiszemle.hu/letoltes/fer-17-4-st4-kiss.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:17:y:2018:i:4:p:95-111