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The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach

Glenn Boyle (), Roger Stover, Amrit Tiwana and Oleksandr Zhylyevskyy ()

Journal of Financial Intermediation, 2015, vol. 24, issue 4, 590-601

Abstract: We investigate the effectiveness of initiating deposit insurance at the outset of a banking crisis. Using a conjoint analysis approach that allows us to consider the simultaneous impact of multiple deposit insurance attributes and various counterfactuals, we ask a multinational sample of respondents how they would view hypothetical account profiles following the failure of a large competing bank. Previous experience matters: respondents from countries without explicit deposit insurance exhibit greater withdrawal risk, suggesting that the introduction of deposit insurance during a crisis may be only partially successful in preventing bank runs. They also impose a higher deposit interest rate premium. Having a long-term bank relationship reduces withdrawal risk, as does the absence of co-insurance.

Keywords: Deposit insurance; Banking crises; Bank runs; Conjoint analysis (search for similar items in EconPapers)
Date: 2015
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Working Paper: The Impact of Deposit Insurance on Depositor Behavior During a Crisis: A Conjoint Analysis Approach (2015) Downloads
Working Paper: The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach (2015) Downloads
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DOI: 10.1016/j.jfi.2015.02.001

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