Working Paper: NBER ID: w20278
Authors: Asli Demirgüç-Kunt; Edward J. Kane; Luc Laeven
Abstract: This paper provides a comprehensive, global database of deposit insurance arrangements as of 2013. We extend our earlier dataset by including recent adopters of deposit insurance and information on the use of government guarantees on banks' assets and liabilities, including during the recent global financial crisis. We also create a Safety Net Index capturing the generosity of the deposit insurance scheme and government guarantees on banks' balance sheets. The data show that deposit insurance has become more widespread and more extensive in coverage since the global financial crisis, which also triggered a temporary increase in the government protection of non-deposit liabilities and bank assets. In most cases, these guarantees have since been formally removed but coverage of deposit insurance remains above pre-crisis levels, raising concerns about implicit coverage and moral hazard going forward.
Keywords: Deposit Insurance; Financial Institutions; Financial Crises
JEL Codes: G01; G21; G28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Expansion of deposit insurance schemes (G28) | Reduction in bank runs during the financial crisis (E44) |
| Presence of government guarantees on non-deposit liabilities (H81) | Moral hazard (G52) |
| Government financial health (H69) | Effectiveness of deposit insurance (G28) |
| Introduction of government guarantees (H81) | Increased depositor protection (G28) |