Deposit Insurance without Commitment: Wall St. versus Main St
AbstractThis paper studies the provision of deposit insurance without commitment in an economy with heterogenous households. When households are identical, deposit insurance will be provided ex post to reap insurance gains. But the ex post provision of deposit insurance redistributes consumption when households differ in their claims on the banking system as well as in their tax obligations to finance the deposit insurance. Deposit insurance will not be provided ex post if it requires a (socially) undesirable redistribution of consumption which outweighs insurance gains.
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Bibliographic InfoPaper provided by European University Institute in its series Economics Working Papers with number ECO2011/07.
Date of creation: 2011
Date of revision:
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Other versions of this item:
- Russell Cooper & Hubert Kempf, 2011. "Deposit Insurance Without Commitment: Wall St. Versus Main St," NBER Working Papers 16752, National Bureau of Economic Research, Inc.
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-DGE-2011-03-26 (Dynamic General Equilibrium)
- NEP-IAS-2011-03-26 (Insurance Economics)
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