Culture and banking. The case of depositor discipline

Culture, as a collective programming of the minds, affects all human decisions. It also influences the attitudes, preferences, judgments, and decisions of depositors and bank managers. Consequently, culture plays an important role in shaping one of the key mechanisms safeguarding bank soundness: depositor discipline. This article discusses the concepts of culture and depositor discipline. Next, we review the extant empirical evidence and present new findings concerning the impact of culture on depositor discipline worldwide.