The 2023 banking turmoil revived questions about whether bank regulation and supervision can properly mitigate new risks emerging in a highly volatile environment.
While many have focused on the role of digital technology in bringing about this situation in the US, policymakers and practitioners must acknowledge the other contributing factors to best shape the appropriate policy response.
In this blog, I argue that the combination of digital technology and social media magnifies the impact of digital bank runs which, in and of themselves, are not new.
Moreover, a little probing into recent research suggests other fault lines — such as corporate flight-to-quality and lack of deep banking relationships — need to be tackled too. (...)
In this blog, I argue that the combination of digital technology and social media magnifies the impact of digital bank runs which, in and of themselves, are not new.
Moreover, a little probing into recent research suggests other fault lines — such as corporate flight-to-quality and lack of deep banking relationships — need to be tackled too. (...)
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