 The Spread of Deposit Insurance and the Global Rise in Bank Asset Risk since the 1970sCharles W. Calomiris (cc374@columbia.edu) and Sophia Chen (ychen2@imf.org) Working Papers from eSocialSciences Abstract: The paper constructs a new measure of the changing generosity of deposit insurance for many countries, empirically model the international influences on the adoption and generosity of deposit insurance, and show that the expansion of deposit insurance generosity increased asset risk in banking systems. It considers three asset risk measures: higher loans-to-assets, a higher proportion of lending to households, and a higher proportion of mortgage lending. None of the observed increases in these indicators is offset by declines in banking system leverage. The paper shows that increased asset risk explains at least part of the positive association between deposit insurance and the likelihood and severity of systemic banking crises. Keywords: eSS; deposit insurance; global rise; bank asset risk; generosity of deposit insurance; insurance; banking system; risk management; risk measures; higher loans-to-assets; a higher proportion of lending to households; mortgage lending; asset risk; positive association; likelihood; systemic banking crises (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ess:wpaper:id:12909 Access Statistics for this paper More papers in Working Papers from eSocialSciences |
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