The Use of Market Information in Pricing Deposit Insurance
AbstractThis paper argues that information about the value of the deposit-insurance guarantee is available from market- generated data. In the most favorable circumstances, one may construc t an unbiased estimate of the market value of the deposit guarantee. In less favorable circumstances, one can at least construct a lower bound against which estimates of deposit-insurance premia can be comp ared. Without deposit-insurance reforms, the total guarantee associat ed with federal deposit insurance includes the guarantee on insured d eposits, a conditional guarantee on uninsured deposits, and a conditi onal guarantee of the stockholders' residual claim on the future earn ings of the bank. Copyright 1987 by Ohio State University Press.
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Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 19 (1987)
Issue (Month): 4 (November)
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Other versions of this item:
- James B. Thomson, 1986. "The use of market information in pricing deposit insurance," Working Paper 8609, Federal Reserve Bank of Cleveland.
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- DeGennaro, Ramon P. & Thomson, James B., 1995.
"Anticipating bailouts: The incentive-conflict model and the collapse of the Ohio deposit guarantee fund,"
Journal of Banking & Finance,
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- Ramon P. DeGennaro & James B. Thomson, 1994. "Anticipating bailouts: the incentive-conflict model and the collapse of the Ohio Deposit Guarantee Fund," Working Paper 9407, Federal Reserve Bank of Cleveland.
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- William P. Osterberg & James B. Thomson, 1990. "Optimal financial structure and bank capital requirements: an empirical investigation," Working Paper 9007, Federal Reserve Bank of Cleveland.
- Kane, Edward J. & Yu, Min-Teh, 1996. "Opportunity cost of capital forbearance during the final years of the FSLIC mess," The Quarterly Review of Economics and Finance, Elsevier, vol. 36(3), pages 271-290.
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- Ying Yan, 1998. "The FDICIA and bank CEOs' pay-performance relationship: an empirical investigation," Working Paper 9805, Federal Reserve Bank of Cleveland.
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