Todd Keister

The paper shows how rising inequality may lead to an equilibrium with more banks/deposits in the “fragile region”, but the effect could also go in the opposite direction. Seems like a useful framework for thinking about SVB and related. 3/3

Different banks cater to depositors of different wealth. Banks with small depositors are stable because everyone is confident the govt will protect those deposits. Runs can occur on banks with wealthy depositors because they may not be fully protected. (Sound familiar?) 2/3

Events at SVB and other banks remind me of this paper, which studies how inequality affects stability in the banking system. doi.org/10.1016/j.jmon… 1/3

@mazzimon77 A bit late to the game, but this quote from Solow just came to mind

Should central banks issue digital currencies? Don’t miss the panel discussion by Gary Gorton (Yale), @HyunSongShin (BIS), and Christopher Waller (FR Board) on Friday. To register, please visit cbanddc.net.

Recently accepted by REStud: “Should Central Banks Issue Digital Currency?” @todd_keister and D. Sanches show the answer is often “yes” even if #CBDC competes with deposits and raises bank funding costs. restud.com/paper/should-c…