Banking Panics: Prevention Policy and Strategy of Borrowers

This work combines the basic theoretical knowledge on the topic of bank panics, policies for their prevention and behavior of borrowers. It will show the importance of the role of deposit insurance in the banking system, highlight the main problems and factors of optimization of the stress systems. Attention is paid to the importance of differentiating banks and insurance premium rates. The work will also focus on informing the public about the state of banks as one of the means of changing the behavior of depositors. The study will review the work of key researchers in the relationship between banks and investors, and study the theory of banking crises. A comparative analysis of the prerequisites and approaches to modeling banking panics is made. A model is developed to calculate the boundary value of a certain external signal received by investors from a banking crisis, which determines their behavior. Also, the work has developed an economic and mathematical model that will allow analyzing the relationship between the bank and investors in the absence of a deposit insurance system, namely when the bank itself has to spend money for risk management and allocate funds for early seizures, and if there is one. In it, we will look at the utility functions of the bank and investors and find solutions in which it is sometimes more advantageous for agents to abandon the deposit insurance system while retaining their incentives.