Deposit Insurance

for their helpful comments. Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment. The views stated herein are those of the author and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the Federal Reserve Sys tem .

August 2010. The Bank of Canada observes that monetary authorities in many jurisdictions slashed policy interest rates; and the UK and US introduced unconventional monetary policy operations so that liquidity could continue to be injected into their economies as interest rates approached zero. The Bank of Canada cut its target for the overnight rate to a historic low of one-quarter of one per cent. 5 Ibid. at 5. 6 Ibid. at 8.

This paper examines the role of institutions in economic growth and the role of the institutions created by the Russian state in particular. The author stresses the finding that growth-supporting institutions vary according to the level of economic development in a country. In a post-industrial society, that Russia aspires to be, further economic development requires promotion of institutions securing e.g. property rights and economic freedom. Finally, based on these observations, the three development scenarios frequently discussed in the current Russian economic policy debates are analysed.

BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The views expressed in them are those of their authors and not necessarily the views of the BIS.

Bank closures happen globally due to legal grounds that vary among countries. The adverse effects common to all bank closures include loss of employment, disruptions in the payment and settlement system, loss of public confidence in the stability of the banking system, bank runs, systemic risks and losses imposed on uninsured depositors and other creditors. The researcher's goals are the minimization of losses imposed on the uninsured depositors and other creditors and expeditious recoveries of their claims. Indicators of bank insolvency and their impact on the recoveries of creditors' claims against the assets of closed banks under PDIC liquidation have been examined. Using the Pearson correlational analysis, findings reveal significant statistical link between the liabilities and realizable assets to recoveries of 577 closed banks as of yearend 2011. Findings also show that high debt ratios of 386 or 67% of the 577 closed banks indicated that their liabilities exceed the value of their realizable assets. Thus, these banks cannot pay all their debts, thereby, imposing losses on uninsured depositors and other creditors. To conclude, the researcher recommends that bank regulators should jointly prepare draft bills to be presented to the government legislative branch for reforms in the traditional bank closure practices and in the implementation of the liquidation processes that are detrimental to the best interest of uninsured depositors, creditors and the general public.

This paper uses a two-step methodology to examine the relationship between managerial cost inefficiency and the takeover of U.S. thrifts during a period of market liberalization and widespread takeover activity, 1994 to 2000. In the first stage using stochastic cost frontiers, we estimate controllable managerial cost inefficiency scores for all stock firms operating each year in 1994 to 2000. In a second stage, we use these scores to examine correlates of takeovers, focusing on cost inefficiency. For takeovers by banks, we find a significant negative relationship between cost inefficiency and takeover, suggesting an exit of more cost efficient firms from the thrift industry during this period. However, takeovers by thrifts are associated with other characteristics.

for helpful comments and suggest ions. Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment. The views stated herein are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the Federal Reserve System.

The fact that money, banking, and financial markets interact in important ways seems self-evident. The theoretical nature of this interaction, however, has not been fully explored. To this end, we integrate the Diamond (1997) model of banking and financial markets with the Lagos and Wright (2005) dynamic model of monetary exchange-a union that bears a framework in which fractional reserve banks emerge in equilibrium, where bank assets are funded with liabilities made demandable in government money, where the terms of bank deposit contracts are affected by the liquidity insurance available in financial markets, where banks are subject to runs, and where a central bank has a meaningful role to play, both in terms of inflation policy and as a lender of last resort. Among other things, the model provides a rationale for nominal deposit contracts combined with a central bank lender-of-last-resort facility to promote efficient liquidity insurance and a panic-free banking system. * We thank the editor, Veronica Guerrieri, three anonymous referees,

The crisis at New India Cooperative Bank underscores systemic vulnerabilities within the cooperative banking sector in India. In response to financial instability and liquidity concerns, the Reserve Bank of India (RBI) imposed stringent restrictions under Section 35A read with Section 56 of the Banking Regulation Act, 1949. These measures include prohibiting new loans, restricting deposit withdrawals, banning asset sales, and suspending fresh investments. The regulatory intervention aims to safeguard depositors' interests while stabilizing the bank's financial health. Key Findings A comprehensive financial analysis of New India Cooperative Bank reveals: Liquidity Shortfall: The bank holds only ₹50 crores in cash reserves against ₹2,500 crores in total deposits, creating a severe liquidity crunch. High Non-Performing Assets (NPAs): With ₹320 crores in NPAs, a significant portion of the loan portfolio has turned into bad debt, impacting profitability. Regulatory Non-Compliance: Failure to meet the Capital Adequacy Ratio (CAR) and Liquidity Coverage Ratio (LCR) contributed to RBI's intervention. Weak Governance and Risk Management: Poor internal controls and fraudulent lending practices further exacerbated financial stress. Impact on Customers and Economy Deposit Withdrawal Freeze: Thousands of customers face financial hardship due to their inability to access savings for daily expenses, loan EMIs, and essential bills. Business Disruptions: Small businesses relying on cooperative banking services experience restricted cash flows, affecting local economies. Loss of Public Confidence: The crisis erodes trust in cooperative banks, leading to deposit migration to commercial banks. Comparative Case Studies Similar banking crises in India and globally provide critical lessons: PMC Bank (India, 2019): Collapse due to fraudulent lending, necessitating regulatory intervention. Yes Bank (India, 2020): RBI-led rescue plan involving capital infusion and management overhaul. 2008 Financial Crisis (USA): Liquidity injections and government bailouts to stabilize the banking sector. Recovery Mechanisms and Policy Recommendations To restore financial stability and depositor confidence, the study recommends: Strengthening Regulatory Oversight: Regular stress tests, risk-based supervision, and compliance audits for cooperative banks. Capital Infusion and Mergers: Encouraging financially strong banks to absorb weak cooperative institutions. Enhancing Depositor Protection: Expedited Deposit Insurance and Credit Guarantee Corporation (DICGC) claims to ensure timely payout of insured deposits. Governance Reforms: Strict enforcement of transparency, accountability, and ethical lending practices. Financial Literacy Programs: Educating depositors on risk diversification to reduce dependency on cooperative banks. Conclusion While the RBI's intervention is necessary to prevent systemic risks, it also exposes critical weaknesses in cooperative banking. Long-term reforms, proactive regulatory mechanisms, and enhanced financial governance are essential to ensuring the resilience and sustainability of cooperative banks in India. The future trajectory of New India Cooperative Bank depends on its ability to restructure, recover, and regain depositor confidence.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This study examines how depositors decide among different banks and over time in Colombia, with particular attention to the issue of market discipline. By controlling for a more comprehensive set of risk/return factors, the study strengthens the conventional test for market discipline, and addresses two sets of questions of particular interest: (1) How do banks gain or lose market share? Which specific return or risk factors are the most important in explaining a bank's deposit growth? (2) How well do depositors discriminate between well and poorly managed banks? Panel data estimations for the 1985-99 period show that deposit growth is related to bank fundamentals, even after controlling for other risk-return factors. There is also evidence that depositors' choices effectively discipline banks; following "fundamental" deposit losses, banks tend to improve their fundamentals. Finally, banks with strong fundamentals appear to benefit from lower interest costs and higher lending rates, thus leading to the conclusion that market discipline exists in Colombia -perhaps complemented by "regulatory discipline" -and that moral hazard stemming from deposit insurance is limited, perhaps a consequence of certain design features of the insurance scheme.

Before everyone else, I would thank first Allah for his help in bringing this research to fruition. I am indebted to my parents, Yousef Khasawneh and Shaikha Khasawneh, for their continuous prayers and moral support. I also thank my brothers, sisters and friends for their encouragement. I would like to thank my supervisor, Dr. M. Kabir Hassan, for providing expert guidance throughout the process of writing my dissertation. Dr. Hassan has been a great professor, friend, and brother. I also would like to thank my committee members, Prof.

Мета. Робота присвячена аналізу особливостей розміщення коштів фізичних та юридичних осіб на банківських депозитах в зарубіжних країнах світу з метою використання набутих результатів у вітчизняній практиці. Методика. В процесі написання роботи були використані методи теоретичного узагальнення, економічного аналізу з використанням графічного методу, а також методи порівняння, систематизації та логічного узагальнення. Результати. У роботі проаналізовано підходи до ціноутворення на депозитні продукти в комерційних банках зарубіжних країн світу шляхом аналізу динаміки відсоткових ставок за депозитами фізичних та юридичних осіб протягом 2020-2021 рр. Виявлено наявність як позитивних, так і негативних відсоткових ставок за депозитними продуктами. Так, протягом аналізованого періоду юридичним особам комерційні банки країн ЄС пропонували відкриття рахунків зі ставкою від -0,5% до 0,86%, а фізичним особам -від -0,22% до 1,56%. Визначено основні типи депозитних продуктів, які пропонуються комерційними банками для клієнтів-фізичних осіб. Так, у статті авторами наведені та описані наступні типи депозитів: ощадні, безстрокові, індексовані депозити, депозити, що відкриваються дистанційно для фізичних осіб, які переїжджають до країни на постійне проживання або на навчання, депозитні продукти для клієнтів VIP сегменту, новонароджених, а також з оформленням депозитного сертифікату. Окреслено особливості оподаткування депозитних вкладів фізичних осіб в країнах ЄС та виявлено відсутність оподаткування депозитів в країнах Сходу. Проаналізовано діючі системи страхування депозитів фізичних та юридичних осіб в країнах ЄС та США та здійснено порівняння з існуючою вітчизняною системою. Практична значимість. Результати дослідження депозитної діяльності зарубіжних комерційних банків можуть бути використані комерційними банками України при розробці депозитних продуктів та покращені існуючої депозитної політики, а також науковцями, фахівцями та здобувачами вищої освіти в процесі майбутніх досліджень депозитної діяльності комерційних банків.

Using a database from post-communist, pre-deposit-insurance Russia, we demonstrate the presence of quantity-based sanctioning of weaker banks by both firms and households, particularly after the financial crisis of 1998. Evidence for the standard form of price discipline, however, is notably weak. Estimating the deposit supply function, we show that, particularly for poorly capitalized banks, interest rate increases exhibit diminishing, and eventually negative, returns in terms of deposit attraction, a finding consistent with depositors interpreting the deposit rate itself as a signal of otherwise unobserved bank-level risk.

Using evidence from Russia, we explore the effect of the introduction of deposit insurance on bank risk. Drawing on variation in the ratio of firm deposits to total household and firm deposits before the announcement of deposit insurance, so as to capture the magnitude of the decrease in market discipline after the introduction of deposit insurance, we demonstrate that larger declines in market discipline generate larger increases in traditional measures of risk. These results hold in a difference-in-difference setting in which private domestic banks serve as the treatment group and state and foreign-owned banks, whose deposit insurance regime does not change, serve as a control group.

Banks are the most important financial institutions in Croatia. They issue loans based on receive deposits from citizens and companies. On the other side, depositors are interested for the interest rates on the deposits in banks. Interest rates on bank deposits in Croatia differ regarding the bank size. Taking this into account small banks usually deal with higher risks and savings interest rates than large banks. All Croatian banks are participating in the deposit insurance system and pay the same premiums in fund of deposit insurance scheme, although the premiums differ according to the bank risk levels. Because the deposit insurance and security protection is fixed at the amount of 100, 000 euro, the deposits are safe no matter in which bank they are deposited. To make small banks in Croatia more attractive to depositors, they give higher interest rates on savings. In this article we aim to analyze deposits interest rates between different banks based on their size.

Znano je, da sistem zavarovanja depozitov deluje kot varstveni ukrep v korist deponentov , bank pa tudi celotnega bancnega sistema, saj v casu krize preprecuje nastajanje panike in dvigovanja depozitov iz bank. S to aktualno temo o sistemu zavarovanja depozitov so se ukvarjali stevilni avtorij, vse od Mertona dalje že v letu 1977, vandar sos e znacilnosti sistemov in njihova pomemebnost scasoma spreminjale.

Recent proposals recommend supplemental leverage ratio (SLR) modifications to stimulate securities and derivatives market liquidity and other beneficial bank services that are alleged to have declined as a consequence of Basel III capital regulations. Proposed SLR changes would reduce the amount of capital required to engage in targeted bank activities. Formal analysis demonstrates that the SLR's construction may not be the problem. Debt overhang, caused by high bank leverage, and a poorly designed deposit insurance pricing system could be discouraging targeted activities. Analysis shows that target activities could be stimulated by raising the minimum SLR to reduce the debt overhang problem and revising deposit insurance pricing so that premiums better approximate a fair market price for insurance.

Prompt Corrective Action (PCA) requires regulators to sanction banks before they become insolvent and to resolve institutions within 90 days of reaching critically undercapitalized status. Forensic studies of the financial crisis conclude that the PCA process not only failed to rehabilitate troubled banks, it also produced a higher average failed-bank loss rate compared to the pre-PCA period. The most promising approach for PCA reform is to replace PCA capital ratios with a bank's nonperforming-asset coverage ratio. Research has demonstrated that this simple revision identifies failing institutions before current PCA measures which could significantly reduce Deposit Insurance Fund losses.

The views expressed in this Working Paper :lre those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Advocates for internal model-based capital regulation argue that this approach will reduce costs and remove distortions that are created by rules-based capital regulations. These claims are examined using a Merton-style model of deposit insurance. Analysis shows that internal model-based capital estimates are biased by safety-net-generated funding subsidies that convey to bank shareholders when market and credit risk regulatory capital requirements are set using bank internal model estimates. These subsidies are not uniform across the risk spectrum, and, as a consequence, internal model regulatory capital requirements will cause distortions in bank lending behavior.

We measure the effect of bank failures on economic growth using data from 1900 to 1930, a period without active government stabilization policies and several severe banking crises. VAR model estimates suggest bank failures have long-lasting negative effects on economic growth. A bank failure shock involving one percent of system liabilities leads to a 6.5% reduction in GNP growth within three quarters and a measurable reduction for 10 quarters. Panel VAR model estimates for the 48 states show bank failures aggravate commercial non-bank failures. Institutional and regulatory features affect the intensity of the bank failure effect. We find that bank failures have a larger impact in states with deposit insurance, in states more heavily concentrated in agriculture, and in states with fewer large firms. However, because a number of states exhibit all three characteristics, we are not able to clearly identify the true marginal effects of these factors independently.

The paper aim to analyze the Technical Efficiency of 70 Commercial banks from 19 African countries from 2009-2020. Using the Data Envelopment Analysis (DEA) method of the two main approaches, Variable Return to Scale (VRS) and Constant Return to Scale (CRS) technique on a Panel Data. We find that African banks have a higher efficacy assessment with the VRS than the CRS technique, thus, with high a Pure Technical Efficiency(PTE) score than Technical Efficiency(TE). Our findings show that the majority of the banks are operating at very low levels of efficiency (not technically efficient),and inability to optimize the conversion of bank assets and liabilities in to loan production for customers. Furthermore, the banks are operating inefficiently in scale, economic, and allocative manner due to mismatches in scale of production. Considering these findings, the implications of these inefficiencies extend to the overall economic development and financial stability of the region.

Central Bankers are currently facing big challenges in designing and implementing monetary policy, as well as with safeguarding financial stability, with the world economy still in the process of digesting the legacy of the crisis. The crisis has changed central banking in many ways: by shifting the focus of monetary policy from fighting too high inflation towards fighting too low inflation; by prompting new ‘experimental’ non-conventional measures, which risk to cause large, long-lasting market distortions and imbalances and which also have more far-reaching distributional consequences than ‘normal, conventional’ monetary policy; and by broadening central banks’ responsibilities particularly in the direction of safeguarding banking stability and financial stability at large. This raises several questions for the future: How long will ultra-easy monetary policies last? What are post-crisis growth trajectories, and how will the natural rate of interest rates evolve? How could an exit...

Deposit Insurance Scheme (DIS) has assumed the position of universal importance as a consumer protection scheme for the depositors and investors in the banking sector of nations' economy. The role of Islamic deposit insurance is to create a level playing field between Islamic and conventional banks apart from maintaining a foundation for public confidence in the banks it is also to reinforce the consumer protection aspects that are inherent in Islam. However virtually all the existing DISs are established on legal, regulatory and operational framework devoid of any Islamic bias, meanwhile the Islamic banks and their customers are as much in need of this protection, assurance and sustenance of confidence produced by the scheme as their conventional counterparts. The research therefore examines some of the controversies in the operation of Deposit Insurance as well as its compatibility with Shariah rules under which Islamic banks operate. It looks into the needs and the extent to which Islamic banks can participate into the scheme. The paper concludes that objectives of DIS is compatible with Shariah but also finds out that its designs and some of its operations need to be adjusted for Islamic banks to fully integrated without impairing the provisions of Shariah.

Her research interests are focused on banking and finance, with a particular emphasis on the analysis of deposit insurance schemes. She has acted as a consultant to several banking institutions in Spain. She has also published many academic research articles.

The 1994 Mexican banking crisis led to wholesale changes in the deposit insurance fund in the country’s banking system. Poor lending decisions allowed banks to transfer risk to the fund, resulting in their capturing returns on performing loans, while limiting downside exposure when the fund covered losses on non-performing loans. Through a series of programs, the Mexican banking system now uses performance bonds in concert with the insurance fund. The bonds adjust in price based on the level of risk, and purport to measure the level of safety for the fund. We measure the effect of regulator actions by monitoring performance bond price levels over a 104-month period. Key bank ratios in the areas of liquidity, profitability, activity, and leverage were collected on the largest seven national banks, which control 87% of the capital in the banking system. Through a regression analysis, effects of these bank indicators demonstrate that, while not all are useful for predicting risk reduct...

This thesis was written as a part of master program at NHH. Neither the institution, nor the supervisor and the censors are -through the approval of this thesis -responsible for neither the theories and methods used, nor the results and conclusions drawn in this work.

We present a model of bank passivity and regulatory failure. Banks with low equity positions have more incentives to be passive in liquidating bad loans. We show that they tend to hide distress from regulatory authorities and are ready to offer a higher rate of interest in order to attract deposits compared to banks that are not in distress. Therefore, higher deposit rates may act as an early warning signal of bank failure. We provide empirical evidence that the balance sheet information collected by the Czech National Bank is not a better predictor of bank failure than higher deposit rates. This confirms the importance of asymmetric information between banks and the regulator and suggests the usefulness of looking at deposit rate differentials as early signals of distress in emerging market economies where banks' equity positions are often low.

We analyze the competition in bonus taxation when banks compensate their managers by means of fixed and incentive pay and bankers are internationally mobile. Banks choose bonus payments that induce excessive managerial risk-taking to maximize their private benefits of existing government bailout guarantees. In this setting the international competition in bonus taxes may feature a 'race to the bottom' or a 'race to the top', depending on whether bankers are a source of net positive tax revenue or inflict net fiscal losses on taxpayers as a result of incentive pay. A 'race to the top' becomes more likely when governments' impose only lax capital requirements on banks, whereas a 'race to the bottom' is more likely when bank losses are partly collectivized in a banking union.

This paper examines what institutional and bank-specific factors determine bank stock price synchronicity. Using data on 37 countries from 1996-2007, we find that bank stocks are more aligned with the whole market (1) during the financial crisis; (2) in countries that have more credit provided by banks; (3) in countries that do not have explicit depository insurance; and (4) in countries that have lower bank-level disclosure. The results hold for both emerging and developed economy subsamples. Furthermore, in emerging economies, bank stocks in countries with higher degree of state-owned bank are more synchronized with the whole market, similarly, in developed markets, lower banking freedom enhances bank stock price synchronicity. Finally, the effects of state ownership, protection of property rights, and bank size are all more pronounced when determining bank stock price synchronicity during the financial crisis period.

The collapse of the Ohio Deposit Guarantee Fund (ODGF) in March 1985 provides a laboratory for examining the financial market's belief in the incentive-conflict model proposed by Kane (1989). Research in this area has yet to examine the stock returns of federally insured institutions during that period in the context of this model. Thus, it has not addressed the question of whether financial-market participants recosnize the implications of the model; that is, whether they anticipate the bailouts it implies. This paper fills that void. We find that, on average, stocks of firms insured by the poorly capitalized Federal Savings and Loan Insurance Corporation (FSLIC) do reasonably well during the 41-day event window centered on the ODGFfs Bank Holiday, while stocks of firms insured by the relatively well capitalized Federal Deposit Insurance Corporations (FDIC) do not. More important, differences in abnormal returns of FDIC and FSLIC firms are consistent with a reaffirmation of the incentive-conflict model.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMP policy. Working Papers describe research in progre::.s by the author(s) and are published to elicit comments and to further debate. WP/00I214 This study examines how depositors choose among different banks and over time in Colombia, focusing on whether they discipline bank behavior. By controlling for a more comprehensive set of risk/return factors, the study improves upon conventional market discipline tests. Panel data estimations for 1985-99 show that depositors prefer banks with stronger fundamentals, and that banks tend to improve their fundamentals after being "punished" by depositors. Banks with stronger fundamentals benefit from lower interest costs and higher lending rates. Market (or "regulatory") discipline therefore appears to exist in Colombia, perhaps thanks to certain key design features of the deposit insurance scheme.

Peria and Schmukler examine the banking industries of small insured depositorswho punish risky banks by Argentina, Chile, and Mexico to see if market discipline withdrawing their deposits. existed there in the 1980s and 1990s. Standardized coefficients and variance decomposition Using a set of bank panel data, they test for the of deposits indicate that bank fundamentals are at least as presence of market discipline by studying whether important as other factors affecting deposits. depositors punish risky banks by withdrawing their GMM estimates confirm that the results are robust to deposits. the potential endogeneity of bank fundamentals. They find that across countries and across deposit insurance schemes, market discipline exists even among This papera joint product of Finance, Development Research Group and the Office of the Chief Economist, Latin America and Carribean Region-is part of a larger effort in the Bank to study banking issues affecting developing countries.

Bank-Based and Market-Financial systems tend to be more market-based In higher Based Financial Systems income countries, where stock markets also become CrossCountry Comparisons more active and efficient than Crosscountry Comparisons banks. Financial systems also tend to be more market-Aslh Demirgiiu-Kunt based, even after controlling

Downsizing is the systematic reduction of work force which is often used during economic crisis in order to increase productivity, efficiency, profitability and competitiveness of firms. In literature many studies examine the positive and negative effects of downsizing on firms. The economic crisis in Turkey that emerged in November 2000 and February 2001 caused downsizing in banking sector broadly. The main aim of the study is to examine the relationship between downsizing and financial performance of Turkish banks. The scope of the study is deposit accepting banks operating in Turkey. There is a great amount of decrease in the number of employees working at banks between 2000 and 2003. In this study, the pre and after downsizing performance of the banks is measured by using Paired Samples T-Test. According to the hypothesis test results, there is no significant difference between the profitability of Turkish banks before and after downsizing. Four of the performance variables in h...

This study explored the impact of financial deepening on manufacturing sector in Nigeria using time series data covering 1990 to 2023. Manufacturing sector performance is expressed by growth in manufacturing with financial access, financial depth and financial efficiency serving as indices of financial deepening. The study adopted the ex-post facto research design because of its unique attribute of being able to deals with outcome of events that have already occurred. The data analysis  was done using the  auto regressive distributed lag technique..The findings shown  that financial access and financial depth have positive and significant impact on growth in the manufacturing sector, while financial efficiency was negative and significant to growth in the sector. The study concludes that financial deepening contributed to growth of the manufacturing sector within the period reviewed. It therefore recommends that monetary authorities especially the CBN should implement policies that promote and increase financial depth in the society. Financial institutions such as commercial banks and micro finance banks should be encouraged to increase lending to both SMEs and manufacturing firms in order to boost productivity in the Nigerian economy.

A Deposit Protection or Insurance as the name suggests is intended to provide a sustainable funding to reimburse depositors should an insured act(s) be triggered. Over time, it helps build confidence in the financial ecosystem thereby facilitating a strong and robust financial system. Ghana enacted a Deposit Protection Act in 2016 (the “Act”) and added some new sections in 2018 aimed at protecting small depositors, and create faith and stability in the financial system. However, the Act in its present form can neither protect small depositors nor build any faith and stability in the financial system in Ghana. It is not suggested that a deposit insurance alone can create a stable financial system but the part envisaged by the Deposit Protection Act in creating a stable financial system is seriously undermined by sections in the Act itself. Keywords : Deposit Protection Act, Ghana DOI: 10.7176/JLPG/105-06 Publication date: January 31 st 2021

While in this twenty-first Century (XXIe), questions are rising about the banking system governance and the "post-crisis governance reforms", it is useful to revisit the founding debates of the governance of the twentieth century (XXe). In this area, traditionally, we follow Berle and Means (1932) by tracing separation between shareholders and managers. However, Adam Smith’s banking system view already highlighted the importance of strategic choice of bank executives (risk) in the emergence of crisis phenomena. These strategic choices refer to the relationship between shareholders and managers. From his analysis, one can safely conclude that the way in which ‘Ayr’ bank is managed, that is the role of its governance, constitutes a key determinant of the excessive risk and the fragility of this bank. Specifically, we show that the dispersed Ayr bank’s ownership structure, the asymmetric information between Board and Shareholders and the lack of directors expertise and indepe...

The European Banking Union (EBU) is an essential framework for ensuring financial stability and depositor confidence within the Eurozone. Despite its establishment following the 2008 financial crisis, the EBU exhibits critical vulnerabilities, particularly in light of recent geopolitical tensions and climate-related risks. This article explores the current state of the EBU, identifies key shortcomings such as the absence of a unified European Deposit Insurance Scheme (EDIS), the lack of a centralised fiscal backstop, and fragmented cross-border coordination. It further proposes comprehensive reforms aimed at enhancing the resilience of the Banking Union against emerging risks, including a dual approach to stress testing that incorporates geopolitical scenarios and climate resilience strategies. By reinforcing the EBU's structure and policies, this paper aims to contribute to a more robust financial architecture capable of withstanding future challenges.

We appreciate the insightful and constructive comments and suggestions from participants of the 2017 Bank of Finland Workshop and the 2017 Canadian Deposit Insurance Corporation (CDIC) 50th anniversary meeting. Gaiyan Zhang acknowledges the funding support from the International Studies and Programs of the University of Missouri-St. Louis.

We investigate how explicit deposit insurance affects bank lending during the global financial crisis. Earlier studies find that banks tighten their lending to corporations, lend less to foreign countries (a "flight home" effect), and charge higher interest rates during the crisis. Our study shows that banks in countries with explicit deposit insurance are associated with smaller reductions in total lending and lending to foreign countries, as well as smaller increases in corporate loan spreads. These effects are more pronounced for banks that heavily rely on deposit funding. We also find that more generous or credible deposit insurance designs are associated with stronger stabilization effects on bank lending during the global financial crisis.

The object of this paper is to survey and synthesize the literature on the regulation of financial intermediaries, including the theoretical framework and also the applied literature on specific regulations such as deposit insurance, capital controls, line of business restrictions, etc.

This paper analyses various approaches to dealing with problematic assets of the banking sector. These approaches include the establishment of an asset management company, capital injection and sale of the bank, purchase and assumption transactions, liquidation or bridge bank. All these approaches are evaluated with respect to Czech transformation experience and with respect to experience of other foreign countries. The paper concludes that the establishment of Czech Consolidation Agency (Czech Consolidation Bank, respectively) was the least suitable approach to dealing with problematic assets in the Czech banking sector during the period of the transformation. The paper furthermore suggests that other methods, such as the liquidation accompanied with deposit insurance payments, publicly assisted mergers and acquisitions, or finally privately or publicly assisted purchase and assumption transactions should have been used instead. The knowledge of these alternative approaches to weak...

(I. Kowalska). DISCLAIMER: An objective of the series is to get the research results out quickly, even if their presentations are not fully polished. The findings, interpretations, and conclusions expressed in this Working Paper are those of their author(s) and do not necessarily the views of the Faculty of Management of UW.