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Iyer, Rajkamal
Jensen, Thais Lærkholm
Johannesen, Niels
Sheridan, Adam
Year of Publication: 
Series/Report no.: 
EPRU Working Paper Series 2016-02
We study a run on uninsured deposits in Danish banks triggered by a reform that limited deposit insurance coverage. Using a unique dataset with information about all individual accounts in Danish banks, we show that the reform caused a 50% decrease in deposits above the insurance limit in non-systemic banks, but a much smaller decrease in systemic banks which experienced less withdrawals from uninsured accounts, but also more openings of new uninsured accounts. Our results highlight the significant risks from a differential reallocation of uninsured deposits across banks and, in turn, the need for high insurance limits during a crisis.
Document Type: 
Working Paper

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