IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v67y2024ipbs0275531923002775.html
   My bibliography  Save this article

How does deposit insurance affect household's risk sensitivity？Evidence from China

Author

Listed:
  • Zhao, Jing
  • Gao, Yaqin
  • Zhao, Lijuan

Abstract

Based on the differential protection of household deposits and wealth management products in the limited deposit insurance system, this paper explores effectiveness of bank market discipline and the impact of deposit insurance on market discipline. Using the panel data of Chinese banking industry during 2010–2016, the empirical result shows that, firstly, households are sensitive to bank risks such as capital to asset ratio and non-performing loan ratio (NPL ratio) during the period 2010–2016. Thus, market discipline plays a certain role in the banking industry before introducing deposit insurance. Secondly, deposit insurance increases the risk sensitivity of banks’ wealth management products to capital to assets ratio and NPL ratio, while reducing the risk response of household deposits to these two ratios.

Suggested Citation

  • Zhao, Jing & Gao, Yaqin & Zhao, Lijuan, 2024. "How does deposit insurance affect household's risk sensitivity？Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002775
    DOI: 10.1016/j.ribaf.2023.102151
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531923002775
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2023.102151?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Deposit insurance; Market discipline; Risk sensitivity;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002775. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.