Deposit Insurance and Financial Development
The authors examine the effect of different design features of deposit insurance, on long-run financial development, defined to include the level of financial activity, the stability of the banking sector, and the quality of resource allocation. Th...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/09/1614763/deposit-insurance-financial-development http://hdl.handle.net/10986/19537 |
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okr-10986-195372021-04-23T14:03:43Z Deposit Insurance and Financial Development Cull, Robert Senbet, Lemma W. Sorge, Marco ALLOCATION OF RESOURCES ASSET SUBSTITUTION BALANCE SHEETS BANK ASSETS BANK CAPITAL BANK CAPITALIZATION BANK DEPOSITS BANK LIABILITY BANK MANAGEMENT BANK RISK BANK RUNS BANK SAFETY BANK VALUE BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKS BASLE ACCORD CAPITAL REGULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS COLLATERALIZATION COMPENSATION CORPORATE FINANCE DEBT DEBT FINANCING DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSIT INSURANCE SCHEMES DEPOSIT INSURANCE SYSTEMS DEPOSITORS DEPOSITS ECONOMETRICS ECONOMIC GROWTH EMPIRICAL ANALYSIS EQUITY CAPITAL FINANCIAL DEREGULATION FINANCIAL MARKETS FINANCIAL SAFETY NETS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL VOLATILITY FOREIGN CURRENCY DEPOSITS IMPERFECT INFORMATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSURANCE AGENCIES INSURANCE DESIGN INSURED DEPOSITS INTEREST RATES INVESTMENT DISTORTION LAWS LIQUIDITY MARKET DISCIPLINE MONEY CENTER BANKS MORAL HAZARD PARETO OPTIMAL PORTFOLIOS PREDICTIONS PREMIUMS PRESENT VALUE PROGRAMS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESOURCE ALLOCATION RESOURCE MOBILIZATION RISK TAKING SAVINGS SHAREHOLDERS STOCK MARKETS SYSTEMIC INSTABILITY THRIFT INSTITUTIONS VOLATILITY The authors examine the effect of different design features of deposit insurance, on long-run financial development, defined to include the level of financial activity, the stability of the banking sector, and the quality of resource allocation. Their empirical analysis is guided by recent theories of banking regulation, that employ an agency framework. The authors examine the effect of deposit insurance on the size, and volatility of the financial sector, in a sample of fifty eight countries. They find that generous deposit insurance, leads to financial instability in lax regulatory environments. But in sound regulatory environments, deposit insurance does have the desired impact on financial development, and growth. Thus, countries introducing a deposit insurance scheme, need to ensure that it is accompanied by a sound regulatory framework. Otherwise, the scheme will likely lead to instability, and deter financial development. In weak regulatory environments, policymakers should at least limit deposit insurance coverage. 2014-08-20T21:14:20Z 2014-08-20T21:14:20Z 2001-09 http://documents.worldbank.org/curated/en/2001/09/1614763/deposit-insurance-financial-development http://hdl.handle.net/10986/19537 English en_US Policy Research Working Paper;No. 2682 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ALLOCATION OF RESOURCES ASSET SUBSTITUTION BALANCE SHEETS BANK ASSETS BANK CAPITAL BANK CAPITALIZATION BANK DEPOSITS BANK LIABILITY BANK MANAGEMENT BANK RISK BANK RUNS BANK SAFETY BANK VALUE BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKS BASLE ACCORD CAPITAL REGULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS COLLATERALIZATION COMPENSATION CORPORATE FINANCE DEBT DEBT FINANCING DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSIT INSURANCE SCHEMES DEPOSIT INSURANCE SYSTEMS DEPOSITORS DEPOSITS ECONOMETRICS ECONOMIC GROWTH EMPIRICAL ANALYSIS EQUITY CAPITAL FINANCIAL DEREGULATION FINANCIAL MARKETS FINANCIAL SAFETY NETS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL VOLATILITY FOREIGN CURRENCY DEPOSITS IMPERFECT INFORMATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSURANCE AGENCIES INSURANCE DESIGN INSURED DEPOSITS INTEREST RATES INVESTMENT DISTORTION LAWS LIQUIDITY MARKET DISCIPLINE MONEY CENTER BANKS MORAL HAZARD PARETO OPTIMAL PORTFOLIOS PREDICTIONS PREMIUMS PRESENT VALUE PROGRAMS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESOURCE ALLOCATION RESOURCE MOBILIZATION RISK TAKING SAVINGS SHAREHOLDERS STOCK MARKETS SYSTEMIC INSTABILITY THRIFT INSTITUTIONS VOLATILITY |
| spellingShingle |
ALLOCATION OF RESOURCES ASSET SUBSTITUTION BALANCE SHEETS BANK ASSETS BANK CAPITAL BANK CAPITALIZATION BANK DEPOSITS BANK LIABILITY BANK MANAGEMENT BANK RISK BANK RUNS BANK SAFETY BANK VALUE BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKS BASLE ACCORD CAPITAL REGULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS COLLATERALIZATION COMPENSATION CORPORATE FINANCE DEBT DEBT FINANCING DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSIT INSURANCE SCHEMES DEPOSIT INSURANCE SYSTEMS DEPOSITORS DEPOSITS ECONOMETRICS ECONOMIC GROWTH EMPIRICAL ANALYSIS EQUITY CAPITAL FINANCIAL DEREGULATION FINANCIAL MARKETS FINANCIAL SAFETY NETS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL VOLATILITY FOREIGN CURRENCY DEPOSITS IMPERFECT INFORMATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL ENVIRONMENT INSURANCE AGENCIES INSURANCE DESIGN INSURED DEPOSITS INTEREST RATES INVESTMENT DISTORTION LAWS LIQUIDITY MARKET DISCIPLINE MONEY CENTER BANKS MORAL HAZARD PARETO OPTIMAL PORTFOLIOS PREDICTIONS PREMIUMS PRESENT VALUE PROGRAMS REAL ESTATE LOANS REAL SECTOR REGULATORY FRAMEWORK RESOURCE ALLOCATION RESOURCE MOBILIZATION RISK TAKING SAVINGS SHAREHOLDERS STOCK MARKETS SYSTEMIC INSTABILITY THRIFT INSTITUTIONS VOLATILITY Cull, Robert Senbet, Lemma W. Sorge, Marco Deposit Insurance and Financial Development |
| relation |
Policy Research Working Paper;No. 2682 |
| description |
The authors examine the effect of
different design features of deposit insurance, on long-run
financial development, defined to include the level of
financial activity, the stability of the banking sector, and
the quality of resource allocation. Their empirical analysis
is guided by recent theories of banking regulation, that
employ an agency framework. The authors examine the effect
of deposit insurance on the size, and volatility of the
financial sector, in a sample of fifty eight countries. They
find that generous deposit insurance, leads to financial
instability in lax regulatory environments. But in sound
regulatory environments, deposit insurance does have the
desired impact on financial development, and growth. Thus,
countries introducing a deposit insurance scheme, need to
ensure that it is accompanied by a sound regulatory
framework. Otherwise, the scheme will likely lead to
instability, and deter financial development. In weak
regulatory environments, policymakers should at least limit
deposit insurance coverage. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Cull, Robert Senbet, Lemma W. Sorge, Marco |
| author_facet |
Cull, Robert Senbet, Lemma W. Sorge, Marco |
| author_sort |
Cull, Robert |
| title |
Deposit Insurance and Financial Development |
| title_short |
Deposit Insurance and Financial Development |
| title_full |
Deposit Insurance and Financial Development |
| title_fullStr |
Deposit Insurance and Financial Development |
| title_full_unstemmed |
Deposit Insurance and Financial Development |
| title_sort |
deposit insurance and financial development |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/09/1614763/deposit-insurance-financial-development http://hdl.handle.net/10986/19537 |
| _version_ |
1764439963196194816 |