Financial liberalization, deposit insurance and bank stability
AbstractThis article investigates the impact of implementing an explicit deposit insurance scheme on the likelihood of banking crisis in countries with well-liberalized financial systems. We estimate the probability of a systemic banking crisis using a multivariate logit model in which alternative variables capturing the nature of the deposit protection arrangement enter as explanatory variables along with a set of control variables. We conclude that deposit insurance will be successful in alleviating moral hazard and increase the stability of the financial system only if a sufficient degree of financial liberalization exists.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 15 (2008)
Issue (Month): 10 ()
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Web page: http://www.tandf.co.uk/journals/routledge/13504851.html
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- P.E. Morris, 2010. "Bank failure and deposit protection in offshore Britain: the case of Guernsey," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 18(3), pages 272-292, July.
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