Institutional shock and bank run risk: financial transparency and depositor behavior in the context of the common reporting standard (CRS)

Abstract

The implementation of the Common Reporting Standard (CRS) represents a major reform of international tax governance aimed at enhancing transparency and combating tax evasion. While existing literature has primarily focused on the effects of such mechanisms on the international allocation of capital, their implications for the stability of domestic banking systems remain underexplored. In particular, the literature remains largely silent on the behavioral implications of tax transparency reforms for domestic banking systems dependent on diasporic deposits, thereby creating a significant research gap that this article seeks to address.

This article examines the extent to which the introduction of the CRS can be interpreted as an institutional shock capable of influencing banking trust and depositors’ financial behavior. Using an exploratory qualitative empirical approach, the study highlights the central role of perceived banking confidentiality, fiscal and social concerns, as well as informational dynamics in shaping deposit withdrawal intentions. The analysis is based on 37 semi-structured interviews (33 Moroccan expatriates and 4 banking professionals), processed using NVivo 12 Pro, enabling the identification of dominant thematic nodes (confidentiality, taxation, trust, withdrawal behavior, mimetic effects) and achieving a high level of theoretical saturation.

The findings show that the perception of a loss of confidentiality associated with the CRS may weaken depositors’ trust and increase the risk of a bank run. Beyond this, the study contributes theoretically by extending bank run models—particularly the Diamond–Dybvig model—through the integration of tax transparency as an informational institutional shock, and empirically by highlighting the behavioral mechanisms linking perception, trust, and withdrawal intentions in a diasporic deposit context

Classification JEL : G21, G41, H26, F36

Paper type : Empirical Research