Risky Tweets in Quiet Times: Social Media as an Amplifier of Bank Fragility
Abstract
Does social media amplify bank fragility absent systemic crises (e.g., the SVB crisis)? Using a sample of U.S. commercial banks from 2009 to 2022, we show that heightened Twitter attention increases the sensitivity of non-core deposits-but not core deposits-to bank performance deterioration. This effect intensifies for banks with greater liquidity mismatch and when Twitter discussions are more influential. Neither enhanced bank transparency nor negative sentiment in social media discussions explains these results. Our findings indicate that social media is not merely an information transmitter; it heightens depositors' awareness of peer attention to banks, amplifying deposit outflow sensitivity to weak fundamentals even during calm periods.