Title: When and why do collective heuristics perform well? The case of the interbank market

Authors: Gunnar Wahlström

Addresses: School of Business, Economics and Law, Gothenburg Research Institute, University of Gothenburg, P.O. Box 600, SE 405 30, Sweden

Abstract: This study explains how senior bank managers in two of the worlds' 100 greatest banks act and react on the interbank market. Interviews with senior managers revealed that top management was continuously monitoring other banks. As a crisis appeared to be unfolding, top executives took a step forward and withdrew credit to certain other banks, sidestepping the formal hierarchical credit process used in normal times. This behaviour enabled fast action - a necessity in time-limited crises. Their fast action meant that the two banks had none of the losses experienced in other banks during the global financial crisis of 2007-2009.

Keywords: Heuristic rules; inductive study; bank runs; interbank market.

DOI: 10.1504/IJCA.2018.093061

International Journal of Critical Accounting, 2018 Vol.10 No.3/4, pp.224 - 240

Received: 17 Nov 2017
Accepted: 20 Mar 2018
Published online: 05 Jul 2018 *

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