Intervention with Screening in Panic-Based Runs

• 成果类型: Article
• 署名作者: Shen, Lin; Zou, Junyuan
• 署名单位: INSEAD Business School; INSEAD Business School
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13295
• 发表日期: 2024
• 页码: 357-412
• 关键词: deposit insurance; Government guarantees; global games; Bank runs; COORDINATION; liquidity; debt; equilibrium; sovereign; STABILITY

摘要

Policymakers frequently use guarantees to mitigate panic-based runs in the financial system. We analyze a binary-action coordination game under the global games framework and propose a novel intervention program that screens investors based on their heterogeneous beliefs about the system's stability. The program only attracts investors who are at the margin of running, and their participation boosts all investors' confidence in the financial system. Compared with government guarantee programs, our proposed program is as effective at mitigating runs but features two advantages: it costs less to implement and it is robust to moral hazard.