Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212918
Authors: 
Karas, Alexei
Pyle, William
Schoors, Koen
Year of Publication: 
2019
Series/Report no.: 
BOFIT Discussion Papers No. 10/2019
Abstract: 
Using evidence from Russia, we explore the effect of the introduction of deposit insurance on bank risk. Drawing on within-bank variation in the ratio of firm deposits to total household and firm deposits, so as to capture the magnitude of the decrease in market discipline after the introduction of deposit insurance, we demonstrate for private, domestic banks that larger declines in market discipline generate larger increases in traditional measures of risk. These results hold in a difference-in-difference setting in which state and foreign-owned banks, whose deposit insurance regime does not change, serve as a control.
Subjects: 
deposit insurance
market discipline
moral hazard
risk taking
banks
Russia
JEL: 
E65
G21
G28
P34
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-275-4
Document Type: 
Working Paper

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