IDEAS home Printed from https://ideas.repec.org/a/wsi/serxxx/v67y2022i04ns0217590822500266.html
   My bibliography  Save this article

Which Factors Matter To Deposit Insurance Coverage Limit? Evidence From Emerging Markets

Author

Listed:
  • YIMING CHANG

    (Key Laboratory of High Confidence Software Technologies (MOE), School of Electronics Engineering and Computer Science, Peking University, No. 5, Yiheyuan Road, Haidian District, Beijing, P. R. China†Research Center for Computational Social Science, Peking University, No. 5, Yiheyuan Road, Haidian District, Beijing, P. R. China‡PKU-Haier “Smart Home†Qingdao Joint Innovation Lab, Institute of Computational Social Science Peking University (Qingdao), No. 879, Lijiangxi Road, West Coast New Area, Qingdao, Shandong, P. R. China)

  • XIANGYUAN YU

    (�School of Management, Swansea University, Singleton Park, Swansea SA2 8PP, Wales, UK)

  • SHANGMEI ZHAO

    (�School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing, P. R. China)

  • HAIJUN YANG

    (�School of Economics and Management, Beihang University, No. 37, Xueyuan Road, Haidian District, Beijing, P. R. China)

Abstract

This paper analyzes the effects of the household savings rate, interest rate spread and bank capital to total assets on the relationship between banks’ risk-taking and explicit deposit insurance coverage while controlling for certain macroeconomic factors, bank-level factors and political factors with data from 50 emerging markets. It is found that the U-shaped relationship between banks’ risk-taking and coverage is more apparent in countries with higher household savings rates, lower interest rate spreads or lower bank capital to total assets. The risk-minimizing coverage settings are analyzed and compared with the actual limits for emerging market economies in 2013. For emerging market countries, the effects of the household savings rate, deposit and loan spreads and banks’ capital to assets ratio should be fully considered when setting reasonable deposit insurance coverage, and their interaction with coverage should be emphasized.

Suggested Citation

  • Yiming Chang & Xiangyuan Yu & Shangmei Zhao & Haijun Yang, 2022. "Which Factors Matter To Deposit Insurance Coverage Limit? Evidence From Emerging Markets," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 67(04), pages 1421-1446, June.
    • Handle: RePEc:wsi:serxxx:v:67:y:2022:i:04:n:s0217590822500266
    DOI: 10.1142/S0217590822500266
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217590822500266
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217590822500266?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

    Risk-taking; deposit insurance coverage; household savings rate; interest rate spread; bank capital to total assets; emerging markets;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

    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:wsi:serxxx:v:67:y:2022:i:04:n:s0217590822500266. 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ser/ser.shtml .

    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.