We study the e¤ects of population size in the Peck-Shell analysis of bank runs. We nd that a contract featuring equal-treatment for al- most all depositors of the same type approximates the optimum. Because the approximation also satis es Green-Lin incentive constraints, when the planner...

Sequential service in the banking sector, as modeled by Diamond and Dybvig (1983), is a barrier to full insurance and potential source of financial fragility against which deposit insurance is infeasible (Wallace, 1988). In this paper, we pursue a different perspective, viewing the sequence of...