This paper examines common regulation as cause of interbank contagion. Studies based on the correlation of bank assets and the extent of interbank lending may underestimate the likelihood of contagion because they do not incorporate the fact that banks have a common regulator. In our model, the...

This paper addresses the topic regarding the desirability of competition in banking industry. In a model where banks compete on both deposit and loan markets and where banks can use monitoring technology to control entrepreneurs' behavior, we investigate three questions: what are the effects of...

In early 2009 the EU increased the minimum deposit insurance limit from €20,000 to €100,000 per bank account. Italy was the only country with a limit already set to €103,291 from 1994. To evaluate the impact of the new directive we run a diff-in-diff analysis and compare the bank-size...

Recent literature suggests that higher capital requirements for banks might lead to a socially costly crowding out of deposits by equity. This paper shows that additional equity in banks can help to crowd in deposits. Intuitively, as banks have more equity and become safer, the cost of deposit...

We provide a welfare comparison of the two types of banking regulation commonly used to address moral hazard problems, deposit rate ceilings and minimum capital requirements. It is well understood that interference with the price mechanism may lead to inefficiencies -- in the case of a deposit...

This study examines changes in market discipline in European corporate deposit markets in response to different crisis periods and regulatory initiatives in the European Union. We measure market discipline by investigating the risk sensitivity of uninsured corporate deposits, i.e. by analyzing...

This paper studies the effect of shadow banks on monetary aggregates, credit to private agents, and inter-financial institution transactions by incorporating shadow banks into a simple multiple deposit creation scheme. The simple scheme is carefully modified and extended to reflect leverages...

I study the relation between shadow banking and financial stability in an economy in which banks are susceptible to self-fulfilling runs and in which government-backed deposit insurance is limited. Shadow banks issue only uninsured deposits while commercial banks issue both insured and uninsured...

The present study undertakes an overview of the role of deposit guarantee schemes (DGSs) within the banking crisis management framework. It is structured in four Section:Section 1 discusses the policy objectives of DGSs, namely the protection of depositors and the contribution to the stability...

Using a large panel of US bank holding companies from 2001 to 2015, this study investigate how depositors respond to the bank's discretionary behaviors. We document evidence of a higher deposit rates for banks that engage more in earnings management, suggesting the evidence of market discipline....