Investigación

No ISI

calendar_month Publicación: 30/01/2019

Deposit insurance, bank risk taking, and failures: Evidence from early twentieth-century state deposit insurance systems

I use the introduction of deposit insurance in eight U.S. states in the early twentieth-century to study the effects of deposit insurance on the banking system. Using a triple difference approach exploiting regulatory differences between national and state banks and between states, I find that insured banks experienced higher deposit growth and decreased funding costs. I also observe a replacement of demand deposits by riskier time deposits. However, I find no aggregate effects on failure rates or risk-taking. Using hand-collected micro-level data, I show that small and large banks reacted differently and that banks facing funding problems especially benefited.

Best Paper Award 2020

Fuente: Review of Corporate Finance Studies

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