Dodd-Frank and unlimited deposit insurance

Anna-Leigh Stone

Finance Research Letters, 2022, vol. 47, issue PB

Abstract: This paper is the first to examine the unlimited deposit insurance on noninterest-bearing transaction accounts (NIBTAs) provided by Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. During Dodd-Frank, banks had a smaller ratio of NIBTAs compared to later periods without the unlimited insurance but have larger deposit flows in NIBTAs over the $250,000 FDIC limit. The results suggest that depositors took advantage of the unlimited insurance, but that banks were not harmed by drawdowns when the insurance expired. Furthermore, the results suggest that emergency deposit insurance might be a complement to FDIC insurance during recessionary times.

Keywords: Deposit insurance; Regulation; Federal Deposit Insurance Corporation; Dodd-Frank Wall Street Reform and Consumer Protection Act (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322000617

DOI: 10.1016/j.frl.2022.102739

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