We construct an endogenous growth model in which bank runs occur with positive probability in equilibrium. In this … setting, a bank run has a permanent effect on the levels of the capital stock and of output. In addition, the possibility of a … periods. A bank run in our model is triggered by sunspots, and we consider two different equilibrium selection rules. In the …

make the argument that more bounds can and should be used in bank regulation, first, by showing that the banking … features of bounds can help solve the urgent challenges in the bank chartering and ratings processes …