How do insured deposits affect bank risk? Evidence from the 2008 Emergency Economic Stabilization Act : [version december 2013]

  • This paper tests whether an increase in insured deposits causes banks to become more risky. We use variation introduced by the U.S. Emergency Economic Stabilization Act in October 2008, which increased the deposit insurance coverage from $100,000 to $250,000 per depositor and bank. For some banks, the amount of insured deposits increased significantly; for others, it was a minor change. Our analysis shows that the more affected banks increase their investments in risky commercial real estate loans and become more risky relative to unaffected banks following the change. This effect is most distinct for affected banks that are low capitalized.

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Metadaten
Author:Claudia Lambert, Felix Noth, Ulrich Schüwer
URN:urn:nbn:de:hebis:30:3-331488
URL:http://ssrn.com/abstract=2369236
DOI:https://doi.org/10.2139/ssrn.2369236
Parent Title (German):SAFE working paper series ; No. 38
Series (Serial Number):SAFE working paper series (38)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2013
Year of first Publication:2013
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2014/03/03
Tag:bank regulation; deposit insurance; financial crisis
Issue:version december 2013
Page Number:45
First Page:1
Last Page:42
HeBIS-PPN:348920504
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht