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Market Discipline, Deposit Insurance, and Competitive Advantages: Evidence from the Financial Crisis

Florian Kaposty, Andreas Pfingsten and Christian Domikowsky

Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: First, this study empirically explores whether it is possible to offer full insurance for non-financial depositors whilst maintaining market discipline. Second, we analyze whether a more credible deposit insurance scheme can be a competitive advantage for banks in a systemic crisis. We find (1) evidence for market discipline, and (2) banks ceteris paribus achieving higher growth rates of customer deposits in the financial crisis if they are part of a credible deposit insurance scheme.

JEL-codes: G01 G21 G28 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cba, nep-ias and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168146

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