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dc.contributor.authorSchich, Sebastian T.en_US
dc.date.accessioned2009-08-12T07:17:20Z-
dc.date.available2009-08-12T07:17:20Z-
dc.date.issued2009en_US
dc.identifier.citationEconomics: The Open-Access, Open-Assessment E-Journal 3 2009-20 1-23 doi:10.5018/economics-ejournal.ja.2009-20-
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2009-20-
dc.identifier.urihttp://hdl.handle.net/10419/27539-
dc.description.abstractGovernment provision of a financial safety net for financial institutions has been a key element of the policy response to the current crisis, with governments extending existing guarantees and introducing new ones. These measures have been helpful in avoiding a further accelerated loss of confidence. But they are not costless. Like any guarantee, deposit insurance gives rise to moral hazard, especially if the coverage is unlimited. In the midst of a crisis, the immediate task is to restore confidence, and guarantees can be helpful in that respect. Nonetheless, to keep market discipline operational, it is important to specify when the extra insurance will end, and this timeline needs to be credible. To be able to establish such a timeline the root causes of the lack of confidence - that is the effects of troubled assets on financial firms' health - need to be addressed effectively. On a more fundamental level, once a government has ventured down the road of guarantee expansion, there may be a general perception that a government guarantee will always be available during crisis situations. As a consequence, other elements of the financial safety net may need to be strengthened, including the prudential and supervisory framework.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofserieseconomics - The Open-Access, Open-Assessment E-Journal 2009-20en_US
dc.subject.jelE61-
dc.subject.jelG01-
dc.subject.jelG22-
dc.subject.ddc330en_US
dc.subject.keywordPolicy responses to financial crisisen_US
dc.subject.keywordsafety neten_US
dc.subject.keyworddeposit insuranceen_US
dc.subject.keywordmoral hazarden_US
dc.subject.stwEinlagensicherungen_US
dc.subject.stwBürgschaften_US
dc.subject.stwÖffentliche Kreditvergabeen_US
dc.subject.stwFinanzmarktkriseen_US
dc.subject.stwMoral Hazarden_US
dc.subject.stwWelten_US
dc.titleChallenges Associated with the Expansion of Deposit Insurance Coverage during Fall 2008en_US
dc.typeArticleen_US
dc.identifier.ppn600482421en_US
dc.identifier.urlhttp://www.economics-ejournal.org/economics/journalarticles/2009-20-
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifweej:7605-
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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