Sümeyra Atmaca, Karolin Kirschenmann, Steven Ongena, Koen Schoors, 16 January 2021

Deposit insurance has the potential to preserve and even restore financial stability in times of crises. This column uses evidence from more than 300,000 Belgian depositors of a large European bank during 2008 and 2009 to examine whether increasing deposit insurance coverage supported financial stability during the global financial crisis. It finds that the increase in deposit insurance coverage together with the nationalisation of a bank at the height of the financial crisis in the autumn of 2008 was effective in calming depositors. The effect of increased deposit insurance kicks in most strongly once the bank is reprivatised, and close bank-customer relationships and trust in the government reinforce the effect.

Matthew Richardson, 26 February 2009

Sometimes the best way to repair a severely dilapidated house is to knock it down and rebuild it. This column argues for bank nationalisation as the best hope for maintaining a private banking system. Risky, and it could go wrong, but it is the surest path to avoid a “lost decade” like Japan.

Francisco Rodríguez, 23 February 2009

The development theme in the Global Crisis Debate has elicited many important and novel contributions on what the crisis means for the developing world and how developing nations should react. This column provides a synthesis and commentary of the key proposals.

Events

CEPR Policy Research