Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312573 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-085
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
How does government control over mass media affect banking system? Our theoretical model predicts that if the media are biased, depositors are less likely to run on their bank, but also less likely to deposit their money in the banking system in the first place. Empirically, we show that countries with more media freedom experience both more frequent banking crises and higher levels of financial development. We pin down the underlying mechanism with a case study from Russia's 1998 banking crisis. Banks in areas with more access to an independent TV channel saw their depositors return faster in the aftermath of the crisis, in line with the reasoning that the crisis revealed differences in media bias across TV channels and induced differences in financial development at the bank level.
Subjects: 
bank runs
systemic stability
media freedom
information manipulation
JEL: 
G01
G21
G51
H12
L82
O16
Document Type: 
Working Paper

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