Financial inclusion for financial stability: access to bank deposits and the growth of deposits in the Global Financial Crisis

Rui Han (rui.han.rh@gmail.com) and Martin Melecký

No 6577, Policy Research Working Paper Series from The World Bank

Abstract: In crisis times, depositors get anxious, can run on banks, and withdraw their deposits. Correlated withdrawals of bank deposits could be mitigated if bank deposits are more diversified, that is, held by more individuals. This paper examines the link between the broader access to bank deposits prior to the 2008 crisis and the dynamics of bank deposit growth during the crisis, while controlling for relevant covariates. Employing proxies for access to deposits and the use of bank deposits, the authors find that greater access to bank deposits can make the deposit funding base of banks more resilient in times of financial stress. Policy efforts to enhance financial stability should thus not only focus on macroprudential regulation, but also recognize the positive effect of broader access to bank deposits on financial stability.

Keywords: Debt Markets; Banks&Banking Reform; Access to Finance; Deposit Insurance; Emerging Markets (search for similar items in EconPapers)
Date: 2013-08-01
New Economics Papers: this item is included in nep-ban, nep-cba and nep-ias
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Citations: View citations in EconPapers (56)

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Related works:
Working Paper: Financial Inclusion for Financial Stability: Access to Bank Deposits and the Growth of Deposits in the Global Financial Crisis (2013)
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