A Reexamination of the Over- (or Under-) Pricing of Deposit Insurance

George Pennacchi

Journal of Money, Credit and Banking, 1987, vol. 19, issue 3, 340-60

Abstract: This study shows how fair deposit insurance premia can be calculated using data on bank stock prices, interest rate movements, and income and balance sheet accounts. Fair insurance premia are estimat ed under the alternative assumptions that the FDIC provides either a "limited-term" (variable rate) or "unlimited-term" insurance cont ract to banks. The paper's results suggest that for nearly all of the large commerical banks in the sample, the actual insurance premium c harged by the FDIC falls between the bounds of fair limited-term and unlimited-term insurance premia. Copyright 1987 by Ohio State University Press.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (75)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819870 ... 0.CO%3B2-D&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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:mcb:jmoncb:v:19:y:1987:i:3:p:340-60

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().