1.0UNI FRhttps://www.uni.lu/frUNI FRhttps://www.uni.lu/frBank Competition, Bank Runs and Opacityrich600338<blockquote class="wp-embedded-content" data-secret="4piC4KY580"><a href="https://www.uni.lu/fr/events/bank-competition-bank-runs-and-opacity/">Bank Competition, Bank Runs and Opacity</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://www.uni.lu/fr/events/bank-competition-bank-runs-and-opacity/embed/#?secret=4piC4KY580" width="600" height="338" title="« Bank Competition, Bank Runs and Opacity » — UNI FR" data-secret="4piC4KY580" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script>
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https://www.uni.lu/wp-content/uploads/sites/11/2026/03/03120045/UNIV_SM-Profile_1600x1600px-scaled.jpg25602560AbstractWe examine the competition among and the opacity of bankssubject to rollover risk. Banks imperfectly compete for uninsureddeposits and choose the opacity of their risky investment. In astatic setup, higher bank competition increases the deposit rate,which increases withdrawal incentives due to strategiccomplementarity and thus raises bank fragility. In a dynamic setupwith entry, a theory of bank opacity arises. Opacity trades off astatic cost of larger withdrawals and costly liquidation of investmentwith a dynamic benefit of deterring entry and reducing futurecompetition. We use our framework to evaluate the regulation ofcompetition or transparency. We find that greater competitionincreases deposit rates, fragility, and transparency, while minimumtransparency regulation increases both current and future fragilityand future competition.