We analyze risk sensitive incentive compatible deposit insurance in the presence of private information when the market value of deposit insurance can be determined using Merton's (1977, 3-11) formula.

This paper investigates the determinants of the structure of the banking industry by fitting a monopolistic competition model to a sample of banks drawn from eight EEC countries over 1989-1993. In the theoretical model, banks decide strategically both entry and the branching size of their...