The ambiguity in existing empirical work with respect to effects of deposit insurance schemes on banks’ risk-taking can be resolved if it is recognized that absence of deposit insurance is rarely credible and that the credibility of non-insurance can be enhanced by explicit deposit insurance...

The contribution of this paper is in emphasizing endogenous credit rationing in the <p> analysis of effects of bankruptcy rules on entrepeneurs’ decisions with respect to risk-taking <p> and ex ante skill-development. Unlike most of the literature, both the debt claim <p> and the amount of debt...</p></p></p>