Bailing Out (Firms') Uninsured Deposits: A Quantitative Analysis

N. Aaron Pancost and Roberto Robatto
Additional contact information
Roberto Robatto: https://www.atlantafed.org/who-we-are/people/research/economists/roberto-robatto

No 2026-16, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We document two novel stylized facts about uninsured deposits and bank failures: (i) firms hold more uninsured deposits than households, and (ii) uninsured depositors do not suffer losses in 94 percent of bank failures. We construct a quantitative general equilibrium model designed around these facts. We characterize the marginal benefits of increased insurance for firms' and households' deposits separately, finding higher benefits for household insurance. Quantitatively, the welfare gains from increasing insurance arise primarily from the reduction in bank runs driven by the higher limit on households' deposits. Reducing bailouts increases bank failures due to runs and generates severe macroeconomic effects.

Keywords: uninsured deposits; deposit insurance; bailouts; firms’ deposits; households’ deposits (search for similar items in EconPapers)
JEL-codes: E20 G21 G28 G32 (search for similar items in EconPapers)
Pages: 77
Date: 2026-09-28
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:fip:fedawp:103989

Ordering information: This working paper can be ordered from

DOI: 10.29338/wp2026-16

Access Statistics for this paper

More papers in FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta Contact information at EDIRC.
Bibliographic data for series maintained by Rob Sarwark ().