Journal of Financial Services Research

, Volume 30, Issue 1, pp 93–109 | Cite as

The Depositor Behind the Discipline: A Micro-Level Case Study of Hamilton Bank

  • Andrew Mitsunori Davenport
  • Kathleen Marie McDill


Though uninsured depositors are recognized as a source of market discipline, the possible disciplinary effect of decisions made by fully insured depositors have gone largely unexamined. Using proprietary administrative deposit data at the account level, this paper analyzes depositor behavior at a recently failed institution. The results suggest that although uninsured deposits exited at a greater rate than insured deposits, the vast majority of deposits withdrawn were fully insured. Among types of deposit accounts, the rates of withdrawal for fully insured individual, joint, and trust accounts were relatively high. Uninsured business account owners were highly sensitive to the bank's deteriorating condition. In contrast, owners of uninsured individual retirement accounts effectively exerted no market discipline.


Depositor discipline Account types Uninsured Insured 

JEL Classification

G20 G21 G28 


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Copyright information

© Springer Science + Business Media, LLC 2006

Authors and Affiliations

  • Andrew Mitsunori Davenport
    • 1
  • Kathleen Marie McDill
    • 1
  1. 1.Federal Deposit Insurance CorporationChicagoUSA

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