Customer relationships affect severity of bank runs – research

Swiss experience of the global financial crisis offers natural experiment

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Customers with a close relationship to a troubled bank are less likely to withdraw their money, according to research published on the Bank of England’s blog and in a separate working paper.

Authors Martin Brown, Benjamin Guin and Stefan Morkoetter take advantage of a natural experiment in Switzerland, where the country’s two largest banks, UBS and Credit Suisse, became stressed during the financial crisis, but banks with only domestic operations did not. Survey data on Swiss households

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