Banks should offer ‘equal service’ when facing a run, research finds
Research is based on the experience of the US economy
When a bank is facing a run, the institution should be allowed to offer "equal service" over "sequential service", since this measure "seems to have a beneficial effect on the economy", according to a working paper published by the Bank of Portugal.
The authors of the paper A dynamic quantitative macroeconomic model of bank runs, Elena Mattana and Ettore Panetti, find that a model that allows all depositors who participate in the run to receive the same share of the available resources brings a
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