Bank Runs in Emerging-Market Economies: Evidence from Turkey’s Special Finance Houses

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Bank Runs in Emerging-Market Economies: Evidence from Turkey’s Special Finance Houses

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dc.contributor.author Starr, Martha A.
dc.contributor.author Yilmaz, Rasim
dc.date.accessioned 2009-02-19T13:42:12Z
dc.date.available 2009-02-19T13:42:12Z
dc.date.created 2006-05
dc.date.issued 2006-05
dc.identifier.uri http://hdl.handle.net/1961/4976
dc.description Working paper No. 2006-08. 33 pages. en
dc.description.abstract Recent banking crises in emerging-market countries have renewed debates about deposit insurance. Because insurance erodes banks’ incentives to manage risks prudently, some argue that its elimination would improve bank stability. Yet eliminating insurance could be destabilizing if it recreates risks of self-fulfilling runs. This paper examines dynamics of depositor behavior during a set of runs on Turkey’s Special Finance Houses, an uninsured sub-sector of Islamic banks. Detailed data on withdrawals are analyzed in a vector-autoregressive framework that enables us to distinguish between informational and self-fulfilling elements of runs. We find that both types of dynamics were at work during the runs, suggesting a role for deposit insurance, judiciously used, in ruling out expectational problems that fuel tendencies to run. en
dc.description.sponsorship Department of Economics, American University en
dc.language.iso en_US en
dc.publisher Department of Economics, American University en
dc.subject.other Bank runs en
dc.subject.other Deposit insurance en
dc.subject.other Islamic banks en
dc.subject.other Financial development en
dc.title Bank Runs in Emerging-Market Economies: Evidence from Turkey’s Special Finance Houses en
dc.type Working Paper en


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