The Incentive-Compatible Design of Deposit Insurance and Bank Failure Resolution PDF Download

Author: Beck
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Author: Thorsten Beck
Publisher:
ISBN:
Category : Bank mergers
Languages : en
Pages : 40

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Author: George G. Kaufman
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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This paper reviews the causes of recent banking crises, particularly in the United States. The paper argues that to the extent banks are perceived to be "special," it is primarily because of poorly designed special public policies, particularly safety nets, rather than their inherent characteristics. These flaws have contributed to the costly recent banking crises in most countries of the world. As a result, preventing future crises centers on correcting the flaws in these policies. The U.S. reformed its government-provided deposit insurance structure in the Federal Deposit Insurance and Corporation Improvement Act (FDICIA) of 1991 to reduce the moral hazard problem of banks and the agency problem of regulators. The reform focuses on imposing regulatory discipline that mimics the discipline the market imposes on firms not subject to a safety net and on resolving a troubled bank before its economic capital is negative. If successful, this would impose losses only on shareholders and make deposit insurance effectively redundant. Aspects of this new structure appear to be appropriate for other countries.

Author: G. G. Garcia
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 86

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A well-designed deposit insurance system (DIS) will provide incentives for citizens to keep the financial system sound. However, a poorly designed DIS can foster a financial crisis. This paper, therefore, makes recommendations for creating and running a limited, incentive-compatible, DIS. The paper also examines factors in the decision to grant, temporarily, a comprehensive guarantee, and the design of that guarantee, should a systemic financial crisis nevertheless occur. It concludes with guidance on the removal of that guarantee.

Author: Gillian Garcia
Publisher:
ISBN:
Category :
Languages : en
Pages : 81

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Book Description
A well-designed deposit insurance system (DIS) will provide incentives for citizens to keep the financial system sound. However, a poorly designed DIS can foster a financial crisis. This paper, therefore, makes recommendations for creating and running a limited, incentive-compatible, DIS. The paper also examines factors in the decision to grant, temporarily, a comprehensive guarantee, and the design of that guarantee, should a systemic financial crisis nevertheless occur. It concludes with guidance on the removal of that guarantee.

Author: Thorsten Beck
Publisher: World Bank Publications
ISBN:
Category : Bancos
Languages : en
Pages : 34

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"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. "--World Bank web site.

Author: D. Mayes
Publisher: Springer
ISBN: 0230523919
Category : Business & Economics
Languages : en
Pages : 399

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How to avoid taxpayers paying for bank failures and banking crises? This book provides a proposal and a critique by twelve independent experts. It is addressed particularly to the threat posed in Europe by having large international banks, a history of bailouts and limited means of resolving any future banking crises. It shows how political imperatives and legal constraints currently result in economic losses in many countries round the world.

Author: Ms.Marina Moretti
Publisher: International Monetary Fund
ISBN: 1513512277
Category : Business & Economics
Languages : en
Pages : 88

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This paper updates the IMF’s work on general principles, strategies, and techniques from an operational perspective in preparing for and managing systemic banking crises in light of the experiences and challenges faced during and since the global financial crisis. It summarizes IMF advice concerning these areas from staff of the IMF Monetary and Capital Markets Department (MCM), drawing on Executive Board Papers, IMF staff publications, and country documents (including program documents and technical assistance reports). Unless stated otherwise, the guidance is generally applicable across the IMF membership.

Author: Aslı Demirgüç-Kunt
Publisher: MIT Press
ISBN: 0262042541
Category : Business & Economics
Languages : en
Pages : 415

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Explicit deposit insurance (DI) is widely held to be a crucial element of modern financial safety nets. This book draws on an original cross-country dataset on DI systems and design features to examine the impact of DI on banking behavior and assess the policy complications that emerge in developing countries.

Author:
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 41

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