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Banking Policy and the Pricing of Deposit Guarantees A New Approach

This paper describes a new approach to pricing government deposit guarantees that uses techniques of stochastic process switching employed in the recent literature on exchange rate determination. Our model avoids inconsistent assumptions about the information available to investors and the governmen...

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Bibliographic Details
Main Author: Perraudin, W.
Other Authors: Fries, Steven
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1991
Series:IMF Working Papers
Subjects:
Stock Exchanges
Banks
Finance
Labour; Income Economics
Government Liabilities
Financial Crises
Banks And Banking
Deposit Insurance
Mortgages
Management Accounting & Bookkeeping
Budgeting
Labor
Financial Markets
Budget
Public Financial Management (pfm)
Banking
Financial Risk Management
Depository Institutions
Economic & Financial Crises & Disasters
Wages, Compensation, And Labor Costs: General
Debt Management
Micro Finance Institutions
Debt
Financial Institutions And Services: Government Policy And Regulation
Crisis Management
General Financial Markets: General (includes Measurement And Data)
Sovereign Debt
Auditing
Stock Markets
Wages
Budgeting & Financial Management
Public Finance
Finance: General
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper describes a new approach to pricing government deposit guarantees that uses techniques of stochastic process switching employed in the recent literature on exchange rate determination. Our model avoids inconsistent assumptions about the information available to investors and the government common in previous work based on an option pricing approach. We derive actuarially fair deposit insurance premia and optimal financial reorganization rules and examine the role of banking policies such as capital requirements
Physical Description:22 pages
ISBN:9781451933192

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