Logo
Munich Personal RePEc Archive

Should regulators always be transparent? A bank run experiment

Chakravarty, Surajeet and Choo, Lawrence and Fonseca, Miguel A. and Kaplan, Todd R. (2020): Should regulators always be transparent? A bank run experiment.

[thumbnail of MPRA_paper_99948.pdf]
Preview
PDF
MPRA_paper_99948.pdf

Download (257kB) | Preview

Abstract

We study, using laboratory experiments, the extent to which disclosure policies about the financial health of a bank affect the likelihood of a bank run. We consider two disclosure regimes, full disclosure and no disclosure, under two scenarios: one in which the bank is on average financially solvent and another in which the bank is on average insolvent. When the bank is on average insolvent, the full disclosure regime reduces the expected likelihood of runs. In contrast, when the bank is on average solvent, the full disclosure regime increases the expected likelihood of runs. Our evidence illustrates the importance of contemporary financial disclosure regulations.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.