ERC Advanced Grant · 2024
The OrigINs of FINancial FragilITY
Banking crises are recurrent phenomena. They lead to large declines in economic activity and share two features: i) they are often triggered by runs, i.e., sudden withdrawals by depositors; and ii) they follow episodes of deregulation and/or lax supervision. The 2023 banking turmoil in the U.S. is no exception. After the relaxation of prudential rules in 2018, three midsized banks faced distress as a result of runs, leading to three of the largest failures in history. Motivated by these events, the proposal seeks to enhance our understanding of the occurrence of runs, the process leading to deregulation and the effectiveness of supervision. It is organized in three projects, one theoretical…
From the public funding record at EU CORDIS. Describes the funded project, not the reviews below.