Banking
Panic-driven Bank Runs and Public Communication
Using a household survey with information treatments conducted in the aftermath of the SVB’s collapse, we examine the potential for a large bank’s failure to trigger bank runs and the effectiveness of public communication in containing such a risk. We find that news about SVB’s collapse increases households’ propensity to withdraw bank deposits as people become more worried that their bank may fail and expect larger losses on deposits in case of bank failure. Communication by the Federal Reserve in support of the banking sector and information about FDIC deposit insurance can contain the risk of bank runs, while communication from politicians influences only their electoral base.
Elections Hinder Companies’ Access to Credit
A large body of literature has produced uncertain conclusions about how elections affect firms’ access to credit. In a wide-ranging analysis of firm behavior...
Resisting Regulatory Capture in the 1857 Financial Crisis
The historical origins of financial crises teaches us about changing attitudes toward government intervention into private markets.
A lesson frequently taught by twentieth century economists...
How Should the Law Tackle Rapidly Evolving Financial Technologies?
The last half-century has witnessed an explosion of technology changing how the financial landscape functions for customers and new and legacy banking providers alike....
The Insight and Influence of Douglas Diamond
Chicago Booth professors Zhiguo He and Yueran Ma discuss their admiration for the work and mentorship of 2022 Nobel winner Douglas Diamond.
The economics community...
The Digital Divide During Epidemics: Who Benefits From New Financial Technologies?
A new paper finds that exposure to an epidemic in the current year significantly increases the likelihood that an individual completes financial transactions via...
Reaching for Influence: Do Banks Use Loans to Establish Political Connections?
A new study examines whether privately-owned banks seek political influence by offering preferred loan terms to corporate borrowers with valuable political connections, showing that...
Do People Think Finance Benefits Society?
A new paper seeks to measure popular sentiment toward finance based on mentions of “finance” in millions of books, spanning eight languages and hundreds...
“This Crisis Is Different: the Coronavirus Is a Social Disease Which We Need to Tackle as a Community”
In an extensive interview, former Governor of the Reserve Bank of India and Chicago Booth professor Raghuram Rajan discusses the pandemic's impact on financial...
Over 60 Leading Finance Economists Ask SEC to Revise the Shareholder Voting Draft Reform
The new regulation that Security and Exchange Commissioners voted in November doesn't fix proxy advisory industry duopoly problems, but it actually makes them worse:...
