"A rapidly growing empirical literature is studying the causes and consequences of bank fragility in contemporary economies. The authors reviews the two basic methodologies adopted in cross-country empirical studies-the signals approach and the multivariate probability model-and their...

Explicit deposit insurance tends to be detrimental to bank stability - the more so where bank interest rates are deregulated and the institutional environment is weak. - Based on evidence for 61 countries in 1980-97, Demirgüç-Kunt and Detragiache find that explicit deposit insurance tends to...