FED of New York Staff Reports – Tracing Bank Runs in Real Time

Marco Cipriani, Thomas M. Eisenbach and Anna Kovner

May 2024


We use high-frequency interbank payments data to trace deposit flows in March 2023 and identify twenty-two banks that suffered a run, significantly more than the two that failed but fewer than the number that experienced large negative stock returns. The runs were driven by large (institutional) depositors, rather than many small (retail) depositors. While the runs were related to weak fundamentals, we find evidence for the importance of coordination because run banks were disproportionately publicly traded and many banks with similarly bad fundamentals did not suffer a run. Banks that survived a run did so by borrowing new funds and then raising deposit rates, not by selling liquid securities.

FED of New York Staff Reports No 1104 – Tracing Bank Runs in Real Time