Title
The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach
Campus Units
Economics, Finance
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
2015
Journal or Book Title
Journal of Financial Intermediation
Volume
24
Issue
4
First Page or Article ID Number
590
Last Page
601
DOI
10.1016/j.jfi.2015.02.001
Abstract
We investigate the effectiveness of initiating deposit insurance at the outset of a banking crisis. Using a conjoint analysis approach that allows us to consider the simultaneous impact of multiple deposit insurance attributes and various counterfactuals, we ask a multinational sample of respondents how they would view hypothetical account profiles following the failure of a large competing bank. Previous experience matters: respondents from countries without explicit deposit insurance exhibit greater withdrawal risk, suggesting that the introduction of deposit insurance during a crisis may be only partially successful in preventing bank runs. They also impose a higher deposit interest rate premium. Having a long-term bank relationship reduces withdrawal risk, as does the absence of co-insurance.
Copyright Owner
Elsevier Ltd.
Copyright Date
2015
Language
en
File Format
application/pdf
Recommended Citation
Boyle, Glenn; Stover, Roger D.; Tiwana, Amrit; and Zhylyevskyy, Oleksandr, "The impact of deposit insurance on depositor behavior during a crisis: A conjoint analysis approach" (2015). Economics Publications. 47.
https://lib.dr.iastate.edu/econ_las_pubs/47
Comments
NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Financial Intermediation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Intermediation, [24, 4, (2015)] doi:10.1016/j.jfi.2015.02.001