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Bank runs and noisy signals

J Boonprakaikawe and S Ghosal

CSGR Working Paper No. 70/01

April 2001

 

Abstract:

 

We show that even with noisy signals on the quality of a bank's assets multiple equilibria exist in models of banking. We argue that the conditions under which this happens arise naturally in models of banking.

Keywords: Banking, fundamentals, signals and equilibria

JEL Classifications: D80, D82, G21

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