Bank Runs and Interest Rates

The term structure of interest rates and m e phenomenon of bank runs are widely bur separately studied in me literature. In this paper, we introduce a simple term structure of interest rates in a bank runs model. By allowing depositors to use a symmetric mixed strategy the probability of bank runs c...

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Bibliographic Details
Published in:經濟論文叢刊 2014-03, Vol.42 (1), p.001-021
Main Authors: 陳思寬(Chen,Shi-kuan), 高一誠(Kao, Yi-cheng)
Format: Article
Language:Chinese
Subjects:
EconLit
probabiliry of bank runs
symmetric mixed strategy
term strucrure of interest rates
TSSCI
利率期限結構
對稱混合策略
銀行擠兌機率
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Summary:The term structure of interest rates and m e phenomenon of bank runs are widely bur separately studied in me literature. In this paper, we introduce a simple term structure of interest rates in a bank runs model. By allowing depositors to use a symmetric mixed strategy the probability of bank runs can be derived. Our simulation shows mat a low short-term real interest rate or a high long- term real interest rate would raise the probability of bank runs. This result is consistent with recent empirical findings.
ISSN:1018-3833