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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27280
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| Title: | If History Could be Re-Run: The Provision and Pricing of Deposit
Insurance in 1933 |
| Authors: | Saunders, Anthony
Wilson, Berry |
| Issue Date: | Jan-1995 |
| Series/Report no.: | FIN-94-049 |
| Abstract: | This paper examines cross-subsidy, moral hazard and bank liability
issues related to the provision of federal deposit insurance by
“re-running” its implementation, i.e., determining fair
premium values, over the period 1927-1932. The pre-1933 period was
characterized by historically high asset price volatility, a large
number of bank failures and a weak federal safety net. In this economic
context, we find a high degree of self-insurance on the part of the
banks in our sample, both in terms of higher overall levels of capital
and a strong correlation between capital levels and asset volatility.
Potentially large, regionally-based, cross-subsidies among banks were found. |
| URI: | http://hdl.handle.net/2451/27280 |
| Appears in Collections: | Finance Working Papers
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