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The Impact of Explicit Deposit Insurance in The Uprising of Banking Crises (The Case of LDC's)
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Zahra Afshari *   |
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Abstract: (7267 Views) |
The role of banking system in the economic development of countries is crucial، so the stability of banking system is essential for economic stability. In order to achieve banking stability، some countries established a deposit insurance system. But these kinds of systems reveal relatively complex mechanisms.
In this paper the attempt was made to identify the impact of explicit deposit insurance on uprising of banking crises by using a multivariate logit model based on the evidence of 23 developing countries (including Iran) in 1980 – 2002 period. The results reveal that explicit deposit insurance tends to increase the likelihood of banking crises. the likelihood is increasing in the cases of extensive insurance coverage offered to the depositors، the funded schemes، voluntary deposit insurance system، and the government run(rather than the private sector) banking system. |
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| Keywords: Explicit Deposit Insurance, Banking Crisis, LDC\'s |
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Full-Text [PDF 285 kb]
(2515 Downloads)
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Type of Study: Empirical Study |
Received: 2009/05/16 | Accepted: 2009/08/7 | Published: 2009/08/7
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