Economics, Econometrics and Finance
2 years ago

Banks Reduce Dividends to Prevent Institutional Deposit Runs During Crises

2 views
Asia-Pacific Journal of Financial Studies
Effect of Institutional Depositors on Banks' Dividend Policy: Evidence from Korea during the Global Financial Crisis*
Hyunjae Jung, Jinho Lee, Young S. Park

Paper Summary

During the global financial crisis, banks in Korea paid lower dividends when they had more institutional depositors. This happened because banks were worried about these depositors reacting badly to their policies and causing a bank run.

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