Interbank Deposits and Market Discipline: Evidence from Central and Eastern Europe

Isabelle Distinguin, Tchudjane Kouassi () and Amine Tarazi
Additional contact information
Tchudjane Kouassi: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

Post-Print from HAL

Abstract: There is a considerable debate on the role played by market discipline in the banking industry. Using data for 207 banks across 10 Central and Eastern European countries, this paper empirically analyzes the disciplining role of interbank deposits. We find that market discipline has been effective in Central and Eastern Europe since the implementation of explicit deposit insurance. However, several factors affect the strength of this discipline. State-owned banks are not disciplined probably because they benefit from implicit insurance. Institutional and legal factors, and resolution strategies adopted by countries during banking crises also impact bank risk and the effectiveness of market discipline. Our results indicate that stronger regulatory discipline reduces risk but also weakens market discipline. We are very grateful to two anonymous reviewers,

Keywords: bank risk; market discipline; interbank deposits; transition economics JEL Classifications: G21; G28 _________________________ _ (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://hal.science/hal-01098716v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Published in Journal of Comparative Economics, 2013, 41 (2), pp.544-560. ⟨10.2139/ssrn.2119956⟩

Downloads: (external link)
https://hal.science/hal-01098716v1/document (application/pdf)

Related works:
Journal Article: Interbank deposits and market discipline: Evidence from Central and Eastern Europe (2013)
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:hal:journl:hal-01098716

DOI: 10.2139/ssrn.2119956

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().