Resolution of failed banks by deposit insurers: cross-country evidence

Thorsten Beck and Luc Laeven

No 3920, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Banks&Banking Reform; Financial Crisis Management&Restructuring; Financial Intermediation; Corporate Law; Insurance&Risk Mitigation (search for similar items in EconPapers)
Date: 2006-05-01
New Economics Papers: this item is included in nep-cba, nep-cwa, nep-fmk, nep-ias and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Working Paper: Resolution of failed banks by deposit insurers: Cross-country evidence (2008)
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