Double the Insurance, Double the Funds?

38 Pages Posted: 13 Oct 2020

Date Written: August 8, 2020


The Depositors Insurance Fund and Share Insurance Fund, private organizations in Massachusetts, have provided a full guarantee on deposits held at Massachusetts state-chartered savings and cooperative institutions since 1934. I instrument for the choice to participate in these funds and find that member institutions held on average between 31.7% to 35.5% more deposits over the Federal Deposit Insurance Corporation limit when compared to similar state institutions. In addition, I find that member institutions experienced on average an additional 12% larger flight to deposits than nonmember institutions during the financial crisis. These results show that private deposit insurance might lessen concerns of deposit loss and reduce the burden on federal guarantee programs.

Keywords: deposits, deposit insurance, Depositors Insurance Fund, Share Insurance Fund, Federal Deposit Insurance Corporation

JEL Classification: G21, G28, G01

Suggested Citation

Stone, Anna-Leigh, Double the Insurance, Double the Funds? (August 8, 2020). Available at SSRN: or

Anna-Leigh Stone (Contact Author)

Samford University ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics