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Supply and Demand Effects of Bank Bailouts: Depositors Need Not Apply and Need Not Run.
- Source :
- Journal of Money, Credit & Banking (John Wiley & Sons, Inc.); Sep2023, Vol. 55 Issue 6, p1397-1442, 46p
- Publication Year :
- 2023
-
Abstract
- We address two key issues concerning bank bailout effects on depositor and bank behavior. The first is whether bailouts weaken or strengthen market discipline by depositors through deposit supplies. The second is if bailedāout banks decrease or increase their deposit demands. These questions can only be adequately addressed by analyzing the effects of bailouts on both deposit quantities and prices. We do so for the Troubled Asset Relief Program (TARP) bailouts. Overall, we find that demand changes empirically dominate supply changes, and suggest significantly reduced deposit demand from bailouts. In some cases, however, supply changes dominate and indicate weakened market discipline. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00222879
- Volume :
- 55
- Issue :
- 6
- Database :
- Complementary Index
- Journal :
- Journal of Money, Credit & Banking (John Wiley & Sons, Inc.)
- Publication Type :
- Academic Journal
- Accession number :
- 170394753
- Full Text :
- https://doi.org/10.1111/jmcb.13001