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 paper documents cross-country variation in the relationship between the deposit insurance scheme and liquidity risk in banks and explores the banking sector specific and macroeconomic determinants that can explain the variation. There is a lack of articles exploring the phenomenon in Europe,...

This paper examines the impact of financial market development, financial crises and deposit insurance on bank risk based on macro data of 86 countries during the period 1998-2014. The results show that banking sector development and stock market development have opposing effects on bank risk...

Based on Becker, Kane, Niskanen, and Peltzman's ideas, we develop a model to explain why deposit insurance is adopted even though policymakers are aware of its pitfalls in both theory and practice. In our model, the regulator acts as both a bureaucrat and an entrepreneur to maximize his...

The savings/investment process in capitalist economies is organized around bank-like financial intermediaries (“banks”), making them a central institution of economic growth. These intermediaries borrow from consumer/savers and lend to companies that need resources for investment. In...