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thus dampens the negative effect that deposit insurance has on banks' risk taking. "--World Bank web site …
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institutions dispose a country toward adopting design features that inadequately control risk-shifting. "--World Bank web site …
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in banking"--World Bank web site …
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The degree of risk taking by a bank is related to the size of the gross subsidy that has been extended to the bank by the safety net. This subsidy can be calculated by applying a technique that models deposit insurance as a put option on the bank's assets
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