BIS paper highlights powerful information effects during SVB run
Hearing about SVB made people more likely to run, but good communications helped stem the tide
Information flow had a powerful effect during the run on Silicon Valley Bank (SVB), finds new research published by the Bank for International Settlements.
The working paper explores new survey data on US households’ perceptions of their own banks and the safety of the wider banking sector. The survey was launched in April, in the wake of SVB’s collapse.
Authors Damiano Sandri, Francesco Grigoli, Yuriy Gorodnichenko and Olivier Coibion use a randomised control trial to isolate information
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