The Incentive-Compatible Design of Deposit Insurance and Bank Failure Resolution : Concepts and Country Studies
Deposit insurance schemes and bank failure resolution systems are asked to fulfill conflicting public policy objectives: on the one hand, they are supposed to protect small depositors and prevent contagion risks from bank runs; on the other hand, they are supposed to minimize aggressive risk taking by banks. Beck discusses the incentive-compatible design and interaction of both components of the financial safety net and describes and compares three countries with different safety net arrangements-Brazil, Germany, and Russia.
Summary: | Deposit insurance schemes and bank
failure resolution systems are asked to fulfill conflicting
public policy objectives: on the one hand, they are supposed
to protect small depositors and prevent contagion risks from
bank runs; on the other hand, they are supposed to minimize
aggressive risk taking by banks. Beck discusses the
incentive-compatible design and interaction of both
components of the financial safety net and describes and
compares three countries with different safety net
arrangements-Brazil, Germany, and Russia. |
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