Households' Deposit Insurance Coverage: Evidence and Analysis of Potential Reforms

J. OF MONEY, CREDIT, AND BANKING, Vol. 28 No. 3, August 1996

Posted: 2 Jul 1996

See all articles by Arthur B. Kennickell

Arthur B. Kennickell

Federal Reserve Board - Department of Research & Statistics

Myron L. Kwast

Federal Reserve Board - Division of Research & Statistics

Martha Starr

American University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

It is often suggested that reducing deposit insurance would reduce problems of moral hazard in the banking industry. However, little is known about likely effects of proposed reforms on household depositors. This study uses data from the Survey of Consumer Finances to examine the characteristics of household depositors, particularly those with uninsured funds. We find that large depositors tend to have substantial shares of their assets in insured depositories, yet often fail to keep their holdings within insurance limits. Various explanations for these facts are considered. We also simulate the effects of proposed reforms on the pool of uninsured depositors.

JEL Classification: G21, G22

Suggested Citation

Kennickell, Arthur B. and Kwast, Myron L. and Starr, Martha, Households' Deposit Insurance Coverage: Evidence and Analysis of Potential Reforms. J. OF MONEY, CREDIT, AND BANKING, Vol. 28 No. 3, August 1996. Available at SSRN: https://ssrn.com/abstract=7557

Arthur B. Kennickell (Contact Author)

Federal Reserve Board - Department of Research & Statistics ( email )

20th & C. St., N.W.
Washington, DC 20551
United States
202-452-2247 (Phone)
202-452-5295 (Fax)

Myron L. Kwast

Federal Reserve Board - Division of Research & Statistics

20th and Constitution Avenue NW
Washington, DC 20551
United States
202-452-2909 (Phone)
202-452-3819 (Fax)

Martha Starr

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States
202-885-3747 (Phone)

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