Postmodern Bank Safety Net

af Calomiris

Federal deposit insurance may be "the single most destabilizing influence in the financial system," says economist Charles W. Calomiris in a new study published by AEI. Market discipline provides a better bank safety net than government insurance, he concludes.The Postmodern Bank Safety Net: Lessons from Developed and Developing Economies shows how government deposit insurance subsidizes the risks taken by banks. Weak banks deliberately and sometimes with impunity take on greater risks than they... (Læs mere)