Who Panics During Panics? Evidence from a Nineteenth Century Savings Bank

Using records of the bank accounts of individual depositors, this paper provides a detailed microeconomic analysis of two nineteenth century banking panics. The panics of 1854 and 1857 were not characterized by an immediate mass panic of depositors and had important time dimensions. We examine depositor behavior using a hazard model. Contagion was the key factor in 1854 but it was not strong enough to create more than a local panic. In contrast, the panic of 1857 began with runs by businessmen and banking sophisticates followed by less informed depositors. Uninformed contagion may have been present, but the evidence suggests that this panic was driven by informational shocks in the face of asymmetric information about the true condition of bank portfolios.

Fatou's Lemma for Weakly Converging Probabilities

Fatou's lemma states under appropriate conditions that the integral of the lower limit of a sequence of functions is not greater than the lower limit of the integrals. This note describes similar inequalities when, instead of a single measure, the functions are integrated with respect to different measures that form a weakly convergent sequence