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dc.contributor.authorDrehmann, Mathiasen_US
dc.date.accessioned2009-01-29T15:10:21Z-
dc.date.available2009-01-29T15:10:21Z-
dc.date.issued2002en_US
dc.identifier.urihttp://hdl.handle.net/10419/22849-
dc.description.abstractIn this paper we show that deposit insurance can increase the probability of systemic banking crisis, even though it is optimally designed and its premium is risk related. This is driven by the possibility of contagious bank runs. We prove that contagion only occurs if the correlation between the portfolios of banks is high enough. Without deposit insurance contagious bank runs can impose such great losses on banks, that banks choose less correlated portfolios to avoid contagion altogether. Optimal deposit insurance eliminates this incentive and thus the correlation of portfolios and with it the probability of systemic banking crisis can increase.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesBonn econ discussion papers 2002,28en_US
dc.subject.jelG28en_US
dc.subject.jelG21en_US
dc.subject.ddc330en_US
dc.subject.keywordBank runsen_US
dc.subject.keywordcontagionen_US
dc.subject.keywordsystemic risken_US
dc.subject.keywordinvestment of banksen_US
dc.subject.keyworddeposit insuranceen_US
dc.subject.stwEinlagensicherungen_US
dc.subject.stwBankenkriseen_US
dc.subject.stwBankrisikoen_US
dc.subject.stwBilanzstrukturmanagementen_US
dc.subject.stwKorrelationen_US
dc.subject.stwTheorieen_US
dc.titleWill an optimal deposit insurance always increase financial stability?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn374452083en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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