This paper analyzes a regulator's optimal strategic delay of resolving banks when the regulator's announcement of the intervention delay endogenously affects the depositors' run propensity. Given intervention, the regulator either liquidates the remaining illiquid assets (``prompt corrective...

This paper analyzes a regulator's optimal strategic delay of resolving banks when a resolution causes inefficiencies. The regulator observes depositors' withdrawals at the bank level and needs to decide on how many withdrawals to tolerate before intervening to impose a mandatory stay. The...

In settings of runs on financial firms, policy makers have developed different forms of policy intervention for stopping, easing or preventing runs. This paper characterizes types of policy intervention that indeed lead to a lower run-propensity ex ante versus types that lead to preemptive...