Sophisticated Discipline in Nascent Deposit Markets: Evidence from Post-Communist Russia
Using a database from post-communist, pre-deposit-insurance Russia, we demonstrate the presence of quantity-based sanctioning of weaker banks by both firms and households, particularly after the financial crisis of 1998. Evidence for the standard form of price discipline, however, is notably weak. Estimating the deposit supply function, we show that, particularly for poorly capitalized banks, interest rate increases exhibit diminishing, and eventually negative, returns in terms of deposit attraction, a finding consistent with depositors interpreting the deposit rate itself as a signal of otherwise unobserved bank-level risk.
|Date of creation:||01 Jun 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
More information through EDIRC
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.:
- Cook, Douglas O & Spellman, Lewis J, 1994. "Repudiation Risk and Restitution Costs: Toward Understanding Premiums on Insured Deposits," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 439-59, August.
- Barth, James R. & Caprio, Gerard Jr. & Levine, Ross, 2004.
"Bank regulation and supervision: what works best?,"
Journal of Financial Intermediation,
Elsevier, vol. 13(2), pages 205-248, April.
- Barth, James R. & Caprio Jr., Gerard & Levine, Ross, 2001. "Bank regulation and supervision : what works best?," Policy Research Working Paper Series 2725, The World Bank.
- James R. Barth & Gerard Caprio, Jr. & Ross Levine, 2002. "Bank Regulation and Supervision: What Works Best?," NBER Working Papers 9323, National Bureau of Economic Research, Inc.
- Berger, Allen N, 1995.
"The Relationship between Capital and Earnings in Banking,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 27(2), pages 432-56, May.
- Allen N. Berger, 1994. "The relationship between capital and earnings in banking," Finance and Economics Discussion Series 94-2, Board of Governors of the Federal Reserve System (U.S.).
- Allen Berger, 1994. "The Relationship Between Capital and Earnings in Banking," Center for Financial Institutions Working Papers 94-17, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Brewer, Elijah, III & Mondschean, Thomas H, 1994. "An Empirical Test of the Incentive Effects of Deposit Insurance: The Case of Junk Bonds at Savings and Loan Associations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(1), pages 146-64, February.
- Hannan, Timothy H & Hanweck, Gerald A, 1988.
"Bank Insolvency Risk and the Market for Large Certificates of Deposit,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 20(2), pages 203-11, May.
- Timothy H. Hannan & Gerald A. Hanweck, 1986. "Bank insolvency risk and the market for large certificates of deposit," Working Papers in Banking, Finance and Microeconomics 86-1, Board of Governors of the Federal Reserve System (U.S.).
- Martinez Peria, Maria Soledad & Schmukler, Sergio L., 1999. "Do depositors punish banks for"bad"behavior? : market discipline in Argentina, Chile, and Mexico," Policy Research Working Paper Series 2058, The World Bank.
- Maria Soledad Martinez Peria, 2001.
"Do Depositors Punish Banks for Bad Behavior? Market Discipline, Deposit Insurance, and Banking Crises,"
Journal of Finance,
American Finance Association, vol. 56(3), pages 1029-1051, 06.
- María Soledad Martínez-Peria & Sergio Schmukler, 2002. "Do Depositors Punish Banks for Bad Behavior? Market Discipline, Deposit Insurance, and Banking Crises," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 5, pages 143-174 Central Bank of Chile.
- repec:cup:cbooks:9780521855761 is not listed on IDEAS
- Jan Hanousek & Gerard Roland, 2001.
"Banking Passivity and Regulatory Failure in Emerging Markets: Theory and Evidence from the Czech Republic,"
CERGE-EI Working Papers
wp192, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
- Jan Hanousek & Gerard Roland, 2002. "Banking Passivity and Regulatory Failure in Emerging Markets: Theory and Evidence from the Czech republic," Econometrics 0203004, EconWPA.
- Hanousek, Jan & Roland, Gérard, 2002. "Banking Passivity and Regulatory Failure in Emerging Markets: Theory and Evidence from the Czech Republic," CEPR Discussion Papers 3122, C.E.P.R. Discussion Papers.
- Jan Hanousek & Gerard Roland, 2001. "Banking Passivity And Regulatory Failure In Emerging Markets: Theory And Evidence From The Czech Republic," William Davidson Institute Working Papers Series 424, William Davidson Institute at the University of Michigan.
- Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Caprio, Gerard & Honohan, Patrick, 2004. "Can the unsophisticated market provide discipline?," Policy Research Working Paper Series 3364, The World Bank.
- Koen Schoors, 2001.
"The credit squeeze during Russia's early transition: A bank-based view,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 9(1), pages 205-228, March.
- Schoors, Koen, 1999. "The Credit Squeeze During Russia's Early Transition: A Bank-Based View," CEPR Discussion Papers 2229, C.E.P.R. Discussion Papers.
- A. Karas & K. Schoors, 2005. "Heracles or Sisyphus? Finding, cleaning and reconstructing a database of Russian banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/327, Ghent University, Faculty of Economics and Business Administration.
- Kevin C. Murdock & Thomas F. Hellmann & Joseph E. Stiglitz, 2000. "Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?," American Economic Review, American Economic Association, vol. 90(1), pages 147-165, March.
- Khaled Sherif & Michael Borish & Alexandra Gross, 2003. "State-owned Banks in the Transition : Origins, Evolution, and Policy Responses," World Bank Publications, The World Bank, number 14851, October.
- Demirguc-Kunt, Asl1 & Huizinga, Harry, 1999.
"Market discipline and financial safety net design,"
Policy Research Working Paper Series
2183, The World Bank.
- Eduardo Levy Yeyati & Maria Soledad Martinez Peria & Sergio Schmukler, 2004. "Market Discipline in Emerging Economies: Beyond Bank Fundamentals," Business School Working Papers marketdiscipline, Universidad Torcuato Di Tella.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- William Tompson, 2004. "Banking Reform in Russia: Problems and Prospects," OECD Economics Department Working Papers 410, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2006-829. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurie Gendron)
If references are entirely missing, you can add them using this form.