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Damiano Sandri

Damiano Sandri is a Principal Economist at the Bank for International Settlements and a CEPR Research Fellow. Prior to joining the BIS, Damiano was a Deputy Division Chief in the Research Department of the International Monetary Fund. His research focuses on macro-financial issues, monetary policy, and international finance and has been published in leading academic journals and policy outlets. Damiano has worked as Associate Editor of the IMF Economic Review and holds a PhD in Economics from the Johns Hopkins University.
Monetary Policy

Panic-driven Bank Runs and Public Communication

Damiano Sandri
Using a household survey with information treatments conducted in the aftermath of the SVB’s collapse, we examine the potential for a large bank’s failure to trigger bank runs and the effectiveness of public communication in containing such a risk. We find that news about SVB’s collapse increases households’ propensity to withdraw bank deposits as people become more worried that their bank may fail and expect larger losses on deposits in case of bank failure. Communication by the Federal Reserve in support of the banking sector and information about FDIC deposit insurance can contain the risk of bank runs, while communication from politicians influences only their electoral base.

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