Markus Brunnermeier has been presented with the Michael J. Brennan Best Paper Award for his paper “Who Can Tell Which Banks Will Fail?” The award is presented each year by The Review of Financial Studies (RFS).

Brunnermeier is the Edwards S. Sanford Professor of Economics in the Economics Department at Princeton and the director of Princeton’s Bendheim Center for Finance.

Brunnermeier was honored along with his co-authors, Kristian Blickle and Stephan Luck. They submitted the paper for consideration in the RFS in January of 2024. The winner of the Michael J. Brennan Best Paper Award receives prize money of $10,000.

In “Who Can Tell Which Banks Will Fail?,” Brunnermeier, Blickle, and Luck study the run on the German banking system in 1931 to understand whether depositors anticipate which banks will fail in a major financial crisis. They find that deposits decline by around 20% during the run. Their evidence suggests that banks are better informed about which fellow banks will fail. In turn, banks being informed allows the interbank market to continue providing liquidity even during times of severe financial distress.