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Bank Insolvency, Deposit Insurance and capital Adequacy

Marini, François (2003), Bank Insolvency, Deposit Insurance and capital Adequacy, Journal of Financial Services Research, 24, p. 67–78. 10.1023/A:1025916701866

Type
Article accepté pour publication ou publié
Date
2003
Nom de la revue
Journal of Financial Services Research
Numéro
24
Éditeur
Springer
Pages
67–78
Identifiant publication
Métadonnées
Afficher la notice complète
Auteur(s)
Marini, François
Laboratoire d'Economie de Dauphine [LEDa]
Résumé (EN)
This paper extends the Dowd (2000) model by introducing a risky investment technology. This assumption allows to introduce the possibility of an insolvency crisis. A banker may earn a positive expected profit by insuring depositors against the technological risk. If the bank has adequate capital, the insurance is credible and an insolvency crisis cannot occur. A public safety net may be unnecessary to prevent insolvency crises.
Mots-clés
Bank; Capital; Insurance company
JEL
G22 - Insurance; Insurance Companies; Actuarial Studies
E22 - Investment; Capital; Intangible Capital; Capacity
E32 - Business Fluctuations; Cycles