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Deposit insurance, banking crises, and market discipline: evidence from a natural experiment on deposit flows and rates

Alexei Karas, William Pyle and Koen Schoors UGent (2013) JOURNAL OF MONEY CREDIT AND BANKING. 45(1). p.179-200
abstract
Using evidence from Russia, we carry out what we believe to be the literature's cleanest test of the direct impact of deposit insurance on market discipline and study the combined effect of a banking crisis and deposit insurance on market discipline. We employ a difference-in-difference estimator to isolate the change in the behavior of a newly insured group (i.e., households) relative to an uninsured control group (i.e., firms). The sensitivity of households to bank capitalization diminishes markedly after the introduction of deposit insurance. The traditional wake-up call effect of a crisis is muted by this numbing effect of deposit insurance.
Please use this url to cite or link to this publication:
author
organization
year
type
journalArticle (original)
publication status
published
subject
keyword
G21, G28, E65, RISK, market discipline, deposit insurance, P34
journal title
JOURNAL OF MONEY CREDIT AND BANKING
J. Money Credit Bank.
volume
45
issue
1
pages
179 - 200
Web of Science type
Article
Web of Science id
000313914900007
JCR category
ECONOMICS
JCR impact factor
0.954 (2013)
JCR rank
141/333 (2013)
JCR quartile
2 (2013)
ISSN
0022-2879
DOI
10.1111/j.1538-4616.2012.00566.x
language
English
UGent publication?
yes
classification
A1
copyright statement
I have transferred the copyright for this publication to the publisher
id
3153640
handle
http://hdl.handle.net/1854/LU-3153640
date created
2013-03-01 16:42:51
date last changed
2016-12-19 15:43:46
@article{3153640,
  abstract     = {Using evidence from Russia, we carry out what we believe to be the literature's cleanest test of the direct impact of deposit insurance on market discipline and study the combined effect of a banking crisis and deposit insurance on market discipline. We employ a difference-in-difference estimator to isolate the change in the behavior of a newly insured group (i.e., households) relative to an uninsured control group (i.e., firms). The sensitivity of households to bank capitalization diminishes markedly after the introduction of deposit insurance. The traditional wake-up call effect of a crisis is muted by this numbing effect of deposit insurance.},
  author       = {Karas, Alexei and Pyle, William and Schoors, Koen},
  issn         = {0022-2879},
  journal      = {JOURNAL OF MONEY CREDIT AND BANKING},
  keyword      = {G21,G28,E65,RISK,market discipline,deposit insurance,P34},
  language     = {eng},
  number       = {1},
  pages        = {179--200},
  title        = {Deposit insurance, banking crises, and market discipline: evidence from a natural experiment on deposit flows and rates},
  url          = {http://dx.doi.org/10.1111/j.1538-4616.2012.00566.x},
  volume       = {45},
  year         = {2013},
}

Chicago
Karas, Alexei, William Pyle, and Koen Schoors. 2013. “Deposit Insurance, Banking Crises, and Market Discipline: Evidence from a Natural Experiment on Deposit Flows and Rates.” Journal of Money Credit and Banking 45 (1): 179–200.
APA
Karas, Alexei, Pyle, W., & Schoors, K. (2013). Deposit insurance, banking crises, and market discipline: evidence from a natural experiment on deposit flows and rates. JOURNAL OF MONEY CREDIT AND BANKING, 45(1), 179–200.
Vancouver
1.
Karas A, Pyle W, Schoors K. Deposit insurance, banking crises, and market discipline: evidence from a natural experiment on deposit flows and rates. JOURNAL OF MONEY CREDIT AND BANKING. 2013;45(1):179–200.
MLA
Karas, Alexei, William Pyle, and Koen Schoors. “Deposit Insurance, Banking Crises, and Market Discipline: Evidence from a Natural Experiment on Deposit Flows and Rates.” JOURNAL OF MONEY CREDIT AND BANKING 45.1 (2013): 179–200. Print.