The Spread of Deposit Insurance and the Global Rise in Bank Asset Risk since the 1970s

Charles Calomiris and Sophia Chen ()

No 24936, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We construct a new measure of the changing generosity of deposit insurance for many countries, empirically model the international influences on the adoption and generosity of deposit insurance, and show that the expansion of deposit insurance generosity increased asset risk in banking systems. We consider three asset risk measures: higher loans-to-assets, a higher proportion of lending to households, and a higher proportion of mortgage lending. None of the observed increases in these indicators is offset by declines in banking system leverage. We show that increased asset risk explains at least part of the positive association between deposit insurance and the likelihood and severity of systemic banking crises.

JEL-codes: E32 F55 F65 G01 G18 G21 G28 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-ban, nep-cba, nep-ias, nep-mac and nep-rmg
Note: CF DEV EFG POL
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Published as Charles W. Calomiris & Sophia Chen, 2020. "The Spread of Deposit Insurance and the Global Rise in Bank Asset Risk since the 1970s," Journal of Financial Intermediation, .

Downloads: (external link)
http://www.nber.org/papers/w24936.pdf (application/pdf)

Related works:
Working Paper: The Spread of Deposit Insurance and the Global Rise in Bank Asset Risk since the 1970s (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24936

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24936

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().