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Resolution of failed banks by deposit insurers : Cross-country evidence

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  • Beck, T.H.L.

    (Tilburg University, School of Economics and Management)

Abstract

There is a wide cross-country variation in the institutional structure of bank failure resolution, including the role of the deposit insurer. The authors use quantitative analysis for 57 countries and discuss specific country cases to illustrate this variation. Using data for over 1,700 banks across 57 countries, they show that banks in countries where the deposit insurer has the responsibility of intervening failed banks and the power to revoke membership in the deposit insurance scheme are more stable and less likely to become insolvent. Involvement of the deposit insurer in bank failure resolution thus dampens the negative effect that deposit insurance has on banks'risk taking.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Beck, T.H.L., 2008. "Resolution of failed banks by deposit insurers : Cross-country evidence," Other publications TiSEM f281b9ef-1509-43bc-9761-d, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:f281b9ef-1509-43bc-9761-d7c64b8ce6bd
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    Cited by:

    1. World Bank & International Monetary Fund, 2006. "Financial Sector Assessment Program Update : Republic of Poland - Credit, Growth, and Financial Stability," World Bank Other Operational Studies 16056, The World Bank.
    2. repec:eee:riibaf:v:42:y:2017:i:c:p:1208-1218 is not listed on IDEAS
    3. Daniel Gros, 2012. "Principles of a Two-Tier European Deposit (Re-)Insurance System," Credit and Capital Markets, Credit and Capital Markets, pages 489-499.
    4. Soedarmono, Wahyoe & Sitorus, Djauhari & Tarazi, Amine, 2017. "Abnormal loan growth, credit information sharing and systemic risk in Asian banks," Research in International Business and Finance, Elsevier, pages 1208-1218.
    5. Chiaramonte, Laura & Croci, Ettore & Poli, Federica, 2015. "Should we trust the Z-score? Evidence from the European Banking Industry," Global Finance Journal, Elsevier, vol. 28(C), pages 111-131.
    6. Distinguin, Isabelle & Kouassi, Tchudjane & Tarazi, Amine, 2013. "Interbank deposits and market discipline: Evidence from Central and Eastern Europe," Journal of Comparative Economics, Elsevier, pages 544-560.
    7. Mónica López-Puertas Lamy, 2012. "How does Ownership Structure Influence Bank Risk? Analyzing the Role of Managerial Incentives," Working Papers 1208, Departament Empresa, Universitat Autònoma de Barcelona, revised Nov 2012.
    8. International Monetary Fund, 2007. "Republic of Poland; Financial Sector Assessment Program-Technical Note-Credit, Growth, and Financial Stability," IMF Staff Country Reports 07/103, International Monetary Fund.
    9. Matej Marinc & Razvan Vlahu, 2011. "The Economic Perspective of Bank Bankruptcy Law," DNB Working Papers 310, Netherlands Central Bank, Research Department.
    10. Distinguin, Isabelle & Kouassi, Tchudjane & Tarazi, Amine, 2013. "Interbank deposits and market discipline: Evidence from Central and Eastern Europe," Journal of Comparative Economics, Elsevier, pages 544-560.
    11. Saibal, Ghosh, 2009. "Charter Value and Risk-taking: Evidence from Indian Banks," MPRA Paper 19543, University Library of Munich, Germany.
    12. Beck, Thorsten, 2008. "Bank competition and financial stability : friends or foes ?," Policy Research Working Paper Series 4656, The World Bank.
    13. Egorova, Olga & Kadoshnikova, M.E., 2016. "Basic Principles of Crisis Management and Crisis Management Mechanisms and Oversight," Working Papers 2047, Russian Presidential Academy of National Economy and Public Administration.
    14. Frank Schmielewski & Thomas Wein, 2012. "Are private banks the better banks? An insight into the principal-agent structure and risk-taking behavior of German banks," Working Paper Series in Economics 236, University of Lüneburg, Institute of Economics.
    15. Gerhardt, Maria & Lannoo, Karel, 2011. "Options for reforming deposit protection schemes in the EU," ECRI Papers 4339, Centre for European Policy Studies.

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