Financial Inclusion for Financial Stability : Access to Bank Deposits and the Growth of Deposits in the Global Financial Crisis
In crisis times, depositors get anxious, can run on banks, and withdraw their deposits. Correlated withdrawals of bank deposits could be mitigated if bank deposits are more diversified, that is, held by more individuals. This paper examines the lin...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/08/18121066/financial-inclusion-financial-stability-access-bank-deposits-growth-deposits-global-financial-crisis http://hdl.handle.net/10986/16010 |
| Summary: | In crisis times, depositors get anxious,
can run on banks, and withdraw their deposits. Correlated
withdrawals of bank deposits could be mitigated if bank
deposits are more diversified, that is, held by more
individuals. This paper examines the link between the
broader access to bank deposits prior to the 2008 crisis and
the dynamics of bank deposit growth during the crisis, while
controlling for relevant covariates. Employing proxies for
access to deposits and the use of bank deposits, the authors
find that greater access to bank deposits can make the
deposit funding base of banks more resilient in times of
financial stress. Policy efforts to enhance financial
stability should thus not only focus on macroprudential
regulation, but also recognize the positive effect of
broader access to bank deposits on financial stability. |
|---|