This paper analyzes the influence of market discipline on the risk-taking incentives of banks. It is shown that market discipline reduces risk if banks can credibly commit to a given level of risk before the interest rate on deposits is set. If, however, the bank can readjust the level of risk...

Discussions regarding the planned European Deposit Insurance Scheme (EDIS), the missing third pillar of the European Banking Union, have been ongoing since the Commission published its initial legislative proposal in 2015. A breakthrough in negotiations has yet to be achieved. The gridlock on...

The European banking union has so far lacked its third pillar: a joint insurance fund for bank savings deposits. As the present study shows, this could be a major disadvantage in dealing with the economic impact of the corona pandemic. A scenario in which a wave of corporate insolvencies leads...

Der europäischen Bankenunion fehlt bisher die dritte Säule: ein gemeinsamer Sicherungsfonds für die Einlagen von SparerInnen bei Banken. Wie diese Studie zeigt, könnte dies im Zuge der wirtschaftlichen Auswirkungen der Corona-Pandemie Nachteile mit sich bringen. Ein Szenario, in dem es durch...

The case of deposit insurance introduction in Russia may suggest that institutional change in transition economies was partly driven by subjective factors, and the choice of imported institutions was rather random. The circumstances under which explicit deposit insurance emerged in Russia might...

We employ proprietary data from a large bank to analyze how - in times of crisis - depositors react to a bank nationalization, re-privatization and an accompanying increase in deposit insurance. Nationalization slows depositors fleeing the bank, provided they have sufficient trust in the...

During the global financial crisis (GFC), regulators and policymakers turned to deposit insurers, along with monetary and fiscal measures, to help restore market confidence and promote financial stability. These events have focused attention on the role of deposit insurers and their role in the...