Market Discipline and Deposit Insurance

Article OPEN
Peresetsky, Anatoly (2008)
  • Journal: Applied Econometrics, volume 11, issue 3, pages 3-14
  • Subject: market discipline; deposit insurance; Russia; deposit interest rates
    • jel: jel:E43 | jel:G22 | jel:G21 | jel:G32
    mesheuropmc: virus diseases | geographic locations

The paper examines Russian banks’ household deposit interest rates for the transition period of setting up the deposit insurance system. Monthly observations of Russian banks’ interest rates and balance sheets are used in a fixed effects panel data model. It is shown market discipline has been significantly diminished after switching to the deposit insurance.
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