Market discipline and financial safety net design

Market discipline and financial safety net design by AslД± DemirgГјГ§-Kunt Download PDF EPUB FB2

A substantial literature discusses the potential effects of safety net design and implementation on market discipline. This literature proposes various design features such as limited insurance coverage, co-insurance, and private deposit insurance that leave some room for market discipline in an explicit (public) scheme of deposit insurance.

See. Market discipline and financial safety net design (English) Abstract. There has been little empirical work on the effectiveness of safety nets designed for banks, for lack of data on safety net design across countries.

The authors examine cross-country data on bank-level interest expense and deposit growth for evidence Cited by: The safety net that policymakers design must provide the right mix of market and regulatyory discipline, enough to protect depositors without unduly undermining market discipline on.

Home > Policy Research Working Papers > Market Discipline and Financial Safety Net Design. Secondly and more importantly, we examine whether differences in market discipline across countries can be explained by different design features of financial safety nets.

They find that: 1) Many countries retain some degree of market discipline, regardless of the type of safety net.

2) The existence of explicit deposit insurance lowers banks'interest expenses and makes interest payments less sensitive to bank risk factors, especially bank liquidity.

Request PDF | Market Discipline and Financial Safety Net Design | An important question is whether the financial safety net reduces market discipline on. The safety net that policymakers design must provide the right mix of market and regulatory discipline - enough to protect depositors without unduly undermining market discipline on banks.

There has been little empirical work on the effectiveness of safety nets designed for banks, for lack of data on safety net design across by: Downloadable (with restrictions).

An important question is whether the financial safety net reduces market discipline on bank risk taking. For countries with varying deposit insurance schemes, we find that deposit rates continue to reflect bank riskiness. Cross-country evidence suggests that explicit deposit insurance reduces required deposit interest rates at a cost of reduced market discipline.

Market Discipline and Financial Safety Net Design Abstract An important question is whether the financial safety net reduces market discipline on bank risk taking. For countries with varying deposit insurance schemes, we find that deposit rates continue to reflect bank riskiness.

Cross-country evidence suggests that. The safety net that policymakers design must provide the right mix of market and regulatyory discipline, enough to protect depositors without unduly undermining market discipline on banks. Rating: (not yet rated) 0 with reviews - Be the first. Market discipline and financial safety net design (Inglês) Resumo.

There has been little empirical work on the effectiveness of safety nets designed for banks, for lack of data on safety net design across countries.

The authors examine cross-country data on bank-level interest expense and deposit growth for evidence Cited by: This theoretical framework suggests that the effectiveness of market discipline in containing excessive risk-taking hinges on 1.) the extent of the government safety net 2.) the degree to which the bank is financed by uninsured liabilities and 3.) the extent of.

Evidence of this kind should be useful to policy makers around the world, as they grapple with the question of how to design a financial safety net without undermining market discipline.

To enable this work, we have collected detailed information on the nature of deposit insurance for over 50 countries.

Market discipline and financial safety net design (Английский). Market discipline and financial safety net design (الانكليزية)Cited by: BibTeX @MISC{Demirgüç-Kunt99marketdiscipline, author = {Asli Demirgüç-Kunt and Harry Huizinga}, title = {Market Discipline and Financial Safety Net Design}, year = {}}.

Secondly and more importantly, we examine whether differences in market discipline across countries can be explained by different design features of financial safety nets. Evidence of this kind should be useful to policy makers around the world, as they grapple with the question of how to design a financial safety net without undermining market Author: Asli Demirgüç-Kunt and Harry Huizinga.

By weakening market discipline, safety nets allow the build up of financial imbalances to proceed further. Liquidity constraints are relaxed; insolvency is permitted to grow.

And they can prolong the pain once the imbalances. Market discipline and financial safety net design. for lack of data on safety net design across countries. The authors examine cross-country data on bank-level interest expense and deposit growth for evidence of market discipline in individual countries.

In addition, using cross-country information on deposit insurance systems, they Author: Asl1 Demirguc-Kunt and Harry Huizinga. 市场规则与金融安全网设计 (英语) 摘要. 要设计出一个有效的银行安全网并加以实施是很困难的，因为对银行过分.Banking Sector Deposit Insurance Saving Bank Market Discipline and Harry Huizinga,“Market discipline and financial safety net design,” World Bank, Policy Research, working paper, No.

() Moral Hazard and Reform of the Government Safety Net: A Comment. In: Bisignano J.R., Hunter W.C., Kaufman G.G.

(eds) Global Author: Gerard Caprio.Financial safety net design. This paper examines the effect of explicit deposit insurance on market discipline using the experiences of Bolivia between and This makes it possible to investigate the effect of explicit deposit insurance on market discipline by comparing the behavior of depositors before and after the Cited by: