The impact of information management and control on bank stability was studied by analyzing the suspension of balance sheet publication for state-charter banks in 1933. During this time, state-charter banks experienced fewer deposit outflows compared to national-charter banks. However, the introduction of the Federal Deposit Insurance Corporation in 1934 led to a convergence in the behavior of bank deposits across both types of banks. This suggests that the availability of bank-specific information can influence depositor behavior and the portfolio of assets held by banks.
Image courtesy of interviewee. December 20, 2023