Determinants of Deposit-Insurance Adoption and Design

Asli Demirguc-Kunt, Edward Kane and Luc Laeven

No 12862, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper identifies factors that influence decisions about a country's financial safety net, using a comprehensive dataset covering 180 countries during the 1960-2003 period. Our analysis focuses on how private interest-group pressures, outside influences, and political-institutional factors affect deposit-insurance adoption and design. Controlling for macroeconomic shocks, quality of bank regulations, and institutional development, we find that both private and public interests, as well as outside influences to emulate developed-country regulatory schemes, can explain the timing of adoption decisions and the rigor of loss-control arrangements. Controlling for other factors, political systems that facilitate intersectoral power sharing dispose a country toward design features that accommodate risk-shifting by banks.

JEL-codes: G21 G28 P51 (search for similar items in EconPapers)
Date: 2007-01
New Economics Papers: this item is included in nep-ban and nep-ias
Note: CF
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Citations: View citations in EconPapers (21)

Published as Demirgüç-Kunt, Asli & Kane, Edward J. & Laeven, Luc, 2008. "Determinants of deposit-insurance adoption and design," Journal of Financial Intermediation, Elsevier, vol. 17(3), pages 407-438, July.

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Related works:
Journal Article: Determinants of deposit-insurance adoption and design (2008)
Working Paper: Determinants of deposit-insurance adoption and design (2006)
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