Deposit and Credit Reallocation in a Banking Panic: The Role of State-Owned Banks /
We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits, which migrate to state-owned public sector banks (PSBs) that serve as safe havens. We trace the consequences of the deposit reallocation using granular bank-firm relationship and branch b...
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- Englisch
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Cambridge, Mass.
National Bureau of Economic Research
2022.
- Zusammenfassung:
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We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits, which migrate to state-owned public sector banks (PSBs) that serve as safe havens. We trace the consequences of the deposit reallocation using granular bank-firm relationship and branch balance sheet data. The flight to safety is not a flight to quality. Lending shrinks and credit quality improves at the run banks but worsens at the PSBs receiving the flight-to-safety flows, especially the weaker ones. The resource reallocation is inefficient in the aggregate.
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- 1 online resource: illustrations (black and white);
- Anmerkungen:
- October 2022.
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