Are Uninsured Time Deposits the Canary in the Coal Mine? Evidence From Bank Failures in Two Crises
Publication Date
4-7-2026
Document Type
Article
Publication Title
Journal of Economics and Business
DOI
10.1016/j.jeconbus.2026.106304
Abstract
U. S. banks’ pre-crisis reliance on uninsured time deposits (UTD) helps improve prediction of bank failures during both the Savings and Loan Crisis and the Global Financial Crisis beyond bank fundamentals (CAMEL variables). We find that failing banks enter each crisis with elevated levels of UTD, which is associated with aggressive loan growth prior to the crisis. Failures of banks with high ratios of UTD to assets are driven by lower loan quality, poorer efficiency, and, during the Global Financial Crisis, lower income diversification, rather than deposit runs. We observe that, while some UTD leave weaker banks during crises, many of them stay until failure.
Keywords
bank credit risk, bank failure prediction, depositor discipline, early warning signs, uninsured deposits
Department
Accounting and Finance
Recommended Citation
Artem Meshcheryakov and Vladimir Kotomin. "Are Uninsured Time Deposits the Canary in the Coal Mine? Evidence From Bank Failures in Two Crises" Journal of Economics and Business (2026). https://doi.org/10.1016/j.jeconbus.2026.106304
