A Study of Mutual Insurance for Bank Deposits
20 Pages Posted: 8 Feb 2017
Date Written: 2005
This article displays a study of the mutual insurance of bank deposits. A system where deposits are first insured by a consortium then by the Government is envisaged. We wish to compute the fair premia due to both the consortium and the Government. Various types of covenants aiming at making banks reduce their risks are detailed. These provisions can be, as is the case in Chapter 11, of a Parisian type. This means that surveillance is based on the paths followed by the assets or leverage. We compare these various types of covenants and conclude on the proposal for new regulatory provisions.
JEL Classification: G13, G21
Suggested Citation: Suggested Citation