The dynamics of deposit insurance and the consumption trap

We investigate a banking system subject to repeated macroeconomic shocks and show that without deposit rate control, the banking system collapses with certainty. Any initial level of reserves will delay the collapse but not avoid it. Even without a banking collapse, the economy still converges to a...

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Bibliographic Details

Main Authors:	Gersbach, Hans (Author) , Wenzelburger, Jan (Author)
Format:	Book/Monograph Working Paper
Language:	English
Published:	München CESifo 2001
Series:	CESifo Working Paper 509
In:	CESifo working papers (509)
Subjects:	Arbeitspapier Graue Literatur Bankenkrise Einlagensicherung Finanzintermediäre
Online Access:	Resolving-System, Volltext: http://hdl.handle.net/10419/75829 Verlag, Volltext: http://www.cesifo-group.de/ifoHome/publications/working-papers/CESifoWP/CESifoWPdetails?wp_id=14560905
Author Notes:	Hans Gersbach; Jan Wenzelburger