Can the Deposit Insurance System Prevent the Bank Systemic Risk-An empirical test based on the Panel-Logit model

Abstract

Abstract: Based on the data of 76 sample countries around the world, this paper studies the relationship between the deposit insurance system and the bank systemic risk of the bank by constructing the Panel-Logit model. The result shows that:the market-oriented reform of interest rates will aggravate the instability of the banking system. Then the establishment of deposit insurance system can reduce the probability of bank systemic risk, but the effect is not significant enough. After the completion of interest rate marketization, the financial stability effect of the deposit insurance system will also decline. The strengthening of banking supervision helps to prevent the occurrence of systemic risks. At the same time, when combined with the deposit insurance system, it can form a modern financial safety net and significantly improve the financial stability of the deposit insurance system. In the designing of the deposit insurance system, the stronger independence and regulatory functions of deposit insurance institutions, the depositors' participation in insurance, and the risk-adjusted rates will help to reduce the probability of bank systemic risk.

Key words: deposit Insurance system, interest rate marketization, bank systematic Risk, panel-Logit model

CLC Number:

F830.3

Han Xi-kun, Ma De-gong. Can the Deposit Insurance System Prevent the Bank Systemic Risk-An empirical test based on the Panel-Logit model[J]. , 2019(03): 37-46.

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