ISSN:
1573-0735
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This paper examines the effect of a series of announcements leading to the approval of risk-based deposit insurance premiums on returns to stockholders of commercial banks. Utilizing risk-weighted capital ratios and measures of overall risk, we group banks according to one of the nine-tier insurance categories subsequently defined by the FDIC. During the period in which the new insurance system was considered and approved, we found that stockholders of “well-capitalized,” “healthy” banks experienced wealth changes significantly different from those experienced by less than well-capitalized, less than healthy banks. Although many argued the premium range in the initial insurance schedule was insufficient, the results show that this initial risk-basing marked an important change in the relative burdens imposed by FDIC insurance.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1007926203945
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