Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232464
Authors: 
Karas, Alexei
Pyle, William
Schoors, Koen
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 8867
Abstract: 
Using evidence from Russia, we explore the effect of the introduction of deposit insurance on bank risk. Drawing on variation in the ratio of firm deposits to total household and firm deposits before the announcement of deposit insurance, so as to capture the magnitude of the decrease in market discipline after the introduction of deposit insurance, we demonstrate 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 private domestic banks serve as the treatment group and state and foreign-owned banks, whose deposit insurance regime does not change, serve as a control group.
Subjects: 
deposit insurance
market discipline
moral hazard
risk taking
banks
Russia
JEL: 
G65
G21
G28
P34
Document Type: 
Working Paper

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