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Determinants of deposit-insurance adoption and design

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Author Info
Demirguc-Kunt, Asli
Kane, Edward J.
Laeven, Luc

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Abstract

The authors seek to identify factors that influence decisions about a country's financial safety net, using a new dataset on 170 countries covering the 1960-2003 period. Specifically, they focus on how outside influences, economic development, crisis pressures, and political institutions affect deposit insurance adoption and design. Controlling for the influence of economic characteristics and events such as macroeconomic shocks, occurrence and severity of crises, and institutional development, they find that pressure to emulate developed-country regulatory frameworks and power-sharing political institutions dispose a country toward adopting design features that inadequately control risk-shifting.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3849.

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Date of creation: 01 Feb 2006
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Handle: RePEc:wbk:wbrwps:3849

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Related research
Keywords: Banks&Banking Reform; Economic Theory&Research; Financial Intermediation; Insurance&Risk Mitigation; Financial Crisis Management&Restructuring;

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Joseph P. Hughes & Loretta J. Mester, 2008. "Efficiency in banking: theory, practice, and evidence," Working Papers 08-1, Federal Reserve Bank of Philadelphia. [Downloadable!]
  2. David R. Skeie, 2008. "Banking with nominal deposits and inside money," Staff Reports 242, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  3. Demirguc-Kunt, Asli & Serven, Luis, 2009. "Are all the sacred cows dead ? implications of the financial crisis for macro and financial policies," Policy Research Working Paper Series 4807, The World Bank. [Downloadable!]
  4. Una Okonkwo Osili & Anna Paulson, 2008. "Bank crises and investor confidence," Working Paper Series WP-08-17, Federal Reserve Bank of Chicago. [Downloadable!]
  5. TCHANA TCHANA , Fulbert, 2008. "The Empirics of Banking Regulation," MPRA Paper 9299, University Library of Munich, Germany. [Downloadable!]
  6. Edward J. Kane, 2005. "Can the European Community Afford to Neglect the Need for More Accountable Safety-Net Management?," NBER Working Papers 11860, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Demirguc-Kunt, Asli & Kane, Edward J. & Laeven, Luc, 2006. "Deposit insurance design and implementation : policy lessons from research and practice," Policy Research Working Paper Series 3969, The World Bank. [Downloadable!]
  8. Daniel C. L. Hardy & María Nieto, 2008. "Cross-Border Coordination Of Prudential Supervision And Deposit Guarantees," IMF Working Papers 08/283, International Monetary Fund. [Downloadable!]
  9. Chernykh, Lucy & Rebel, Cole, 2009. "Does Deposit Insurance Improve Financial Intermediation? Evidence from the Russian Experiment," MPRA Paper 12987, University Library of Munich, Germany. [Downloadable!]
  10. Edward Kane, 2006. "Can the European Community Afford to Neglect the Need for More Accountable Safety-Net Management?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 34(2), pages 127-144, June. [Downloadable!] (restricted)
  11. Demirguc-Kunt, Asli & Karacaovali, Baybars & Laeven, Luc, 2005. "Deposit insurance around the world : a comprehensive database," Policy Research Working Paper Series 3628, The World Bank. [Downloadable!]
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