How does Deposit Insurance System Affect Different Banks？ Evidence from China
WANG Yongqin, CHEN Yinghui, XIONG Yawen
China Center for Economic Studies, Fudan University; School of Accounting, Zhongnan University of Economics and Law; School of Economics, Fudan University
Abstract:
It is still an open question what effects introducing deposit insurance systems (hereafter, “DIS”) have on financial institutions in economies with implicit government guarantees. The paper exploits a quasi-natural experiment and uses event study methodology to estimate the effects. The results show that DIS actually makes smaller banks less trustworthy; DIS had more negative effects on small and local banks than large state-owned and shareholding banks. One explanation is that DIS has made implicit government guarantees explicit, leading to fears that guarantees for smaller banks will only be partial, while state-owned banks are believed to be “too big to fail”.
王永钦, 陈映辉, 熊雅文. 存款保险制度如何影响公众对不同银行的信心？——来自中国的证据[J]. 金融研究, 2018, 456(6): 109-122.
WANG Yongqin, CHEN Yinghui, XIONG Yawen. How does Deposit Insurance System Affect Different Banks？ Evidence from China. Journal of Financial Research, 2018, 456(6): 109-122.
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