Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27539 
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dc.contributor.authorSchich, Sebastian T.en
dc.date.accessioned2009-08-12T07:17:20Z-
dc.date.available2009-08-12T07:17:20Z-
dc.date.issued2009-
dc.identifier.citation|aEconomics: The Open-Access, Open-Assessment E-Journal|c1864-6042|v3|h2009-20|nKiel Institute for the World Economy (IfW)|lKiel|y2009|p1-23en
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2009-20en
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
dc.language.isoengen
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen
dc.subject.jelE61en
dc.subject.jelG01en
dc.subject.jelG22en
dc.subject.ddc330en
dc.subject.keywordPolicy responses to financial crisisen
dc.subject.keywordsafety neten
dc.subject.keyworddeposit insuranceen
dc.subject.keywordmoral hazarden
dc.subject.stwEinlagensicherungen
dc.subject.stwBürgschaften
dc.subject.stwÖffentliche Kreditvergabeen
dc.subject.stwFinanzmarktkriseen
dc.subject.stwMoral Hazarden
dc.subject.stwWelten
dc.titleChallenges Associated with the Expansion of Deposit Insurance Coverage during Fall 2008-
dc.typeArticleen
dc.identifier.ppn600482421en
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.enen
dc.identifier.repecRePEc:zbw:ifweej:7605en
econstor.citation.journaltitleEconomics: The Open-Access, Open-Assessment E-Journalen
econstor.citation.issn1864-6042en
econstor.citation.volume3en
econstor.citation.issue2009-20en
econstor.citation.publisherKiel Institute for the World Economy (IfW)en
econstor.citation.publisherplaceKielen
econstor.citation.year2009en
econstor.citation.startpage1en
econstor.citation.endpage23en

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