Economics at your fingertips  

Rethinking deposit insurance on brokered deposits

David Howden ()

Journal of Banking Regulation, 2015, vol. 16, issue 3, 188-200

Abstract: In a bid to understand how the Federal Deposit Insurance Corporation (FDIC) can aid in promoting financial stability, economists have recently called the definition of core deposits into question. Deposit insurance is extended to core deposits because they represent the stable funding base that the banking system relies on for liquidity. The criteria used by the FDIC to determine whether a funding source is insurable are not consistent with any objective criteria available to define core deposits. Herein I assess current FDIC criteria and whether the kinds of deposits currently insured are good candidates for coverage. I find brokered deposits to be particularly ill-suited to insurance. The FDIC could further promote banking-system stability while simultaneously reducing potential costs by ending its extension of insurance to brokered deposits.

Date: 2015
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link) Link to full text PDF (application/pdf) Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Rethinking Deposit Insurance on Brokered Deposits (2015) Downloads
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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Journal of Banking Regulation is currently edited by Dalvinder Singh

More articles in Journal of Banking Regulation from Palgrave Macmillan
Series data maintained by Sonal Shukla ().

Page updated 2018-02-27
Handle: RePEc:pal:jbkreg:v:16:y:2015:i:3:p:188-200