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.įor technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). 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. You can help adding them by using this form. We have no bibliographic references for this item. It also allows you to accept potential citations to this item that we are uncertain about. This allows to link your profile to this item. If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. See general information about how to correct material in RePEc.įor technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact. When requesting a correction, please mention this item's handle: RePEc:eth:wpswif:16-258. You can help correct errors and omissions. Suggested CitationĪll material on this site has been provided by the respective publishers and authors. Next, we show that a judicious combination of deposit insurance and reinsurance eliminates all non-optimal equilibrium allocations. In the latter case, bank lending is too large relative to equity and the probability that the banking system collapses is positive. When the deposit insurance premium is actuarially fair or higher than actuarially fair, two types of equilibria emerge: One type of equilibria supports the socially optimal (Arrow-Debreu) allo- cation, and the other type does not. The deposit insurance fund charges banks a premium per unit of deposits whereas the government finances any necessary bail-outs by lump-sum taxation of households. Any remaining shortfall is implicitly guaranteed by the government. Deposits are explicitly insured by a de- posit insurance fund. Households fund banks through deposits and equity. Firms in the other sector are monitored and financed by banks. One sector is financed by issuing bonds to risk-averse households. The model involves two production sectors. We study the consequences and optimal design of bank deposit insurance in a general equilibrium model.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |