Deposit and Credit Reallocation in a Banking Panic: The Role of State-Owned Banks

This version: February 9, 2025. This paper combines and supersedes earlier papers titled “Government Guarantees and Bank Vulnerability during the Financial Crisis of 2007-09: Evidence from an Emerging Market" and “The Anatomy of a Banking Panic.” We thank Siddhant Bharti, Kavya Ravindranath, and Akshat Vikram Singh for research assistance and Itai Agur, Vadim Elenev, Dasol Kim, Manju Puri, Amiyatosh Purnanandam, Raghuram Rajan, David Sraer, Phil Strahan, Krishnamurthy Subramanian, Prasanna Tantri, David Thesmar, Emil Verner, Vikrant Vig, and the participants and discussants at the European Finance Association, Financial Intermediation Research Society, the International Finance Corporation, Northeast Universities Development Consortium, the NYUNSE conference, and the Western Finance Association. The views expressed are those of the authors and not of any institutions that they were or are affiliated with. In particular, the views do not necessarily represent those of the National Bureau of Economic Research, the IMF, its Management and Executive Board, or IMF policy.

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• August 29, 2023