Tobias König - University of Bonn

Abstract

We quantify the economic cost of systemic bank runs in terms of losses in output and credit. Leveraging a comprehensive dataset spanning 1800-2022, encompassing 178 countries, we define a systemic bank run as an event characterized by aggregate deposit outflows corroborated by narrative evidence. We define a systemic bank run as an event of aggregate deposit outflows accompanied by narrative evidence for a bank run. We find that banking crises that are accompanied by systemic bank runs cause higher output losses and a more severe decline in credit conditions. We demonstrate that even quantitative bank runs without narrative evidence for a systemic run or a banking panic cause significant output losses of up to 7% and a decline in credit-to-GDP of about 15-20%. Additionally, using historical bank-level data, we show that the decline in loans during systemic runs is exclusively driven by those banks that face an actual outflow of deposits. 

Additional information:

• Speaker: Tobias König
• Time: Wednesday, 20.12.2023, 14:45 - 15:45
• Location: Faculty Lounge, Room 0.036 / Online via Zoom
  
  • Zoom-Link
• Further links:
  • Tobias König's webpage
• Organizer: Finance Group
• Contact:
  • Almut Lunkenheimer
  • +49 228 73-9228
  • ifs@uni-bonn.de