The Impact of Deposit Insurance on Depositor Behavior During a Crisis: A Conjoint Analysis Approach
Glenn Boyle (),
Amrit Tiwana and
Oleksandr Zhylyevskyy ()
Staff General Research Papers Archive from Iowa State University, Department of Economics
We investigate the effectiveness of initiating deposit insurance at the outset of a banking crisis. Using a conjoint analysis approach that allows us to consider the simultaneous impact of multiple deposit insurance attributes and various counterfactuals, we ask a multinational sample of respondents how they would view hypothetical account profiles following the failure of a large competing bank. Previous experience matters: respondents from countries without explicit deposit insurance exhibit greater withdrawal risk, suggesting that the introduction of deposit insurance during a crisis may be only partially successful in preventing bank runs. They also impose a higher deposit interest rate premium. Having a long-term bank relationship reduces withdrawal risk, as does the absence of co-insurance.
Keywords: banking crises; Conjoint analysis; deposit insurance; bank runs (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
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Forthcoming in Journal of Financial Intermediation
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Journal Article: The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach (2015)
Working Paper: The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:38656
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