The impact of the liquidity risk on deposit insurance

• Main Authors: Sheng-Chuan Lo, 羅盛銓
• Other Authors: Shih-Cheng Lee
• Format: Others
• Language: en_US
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/4tcynw

碩士 === 元智大學 === 財務金融暨會計碩士班(財務金融學程) === 107 === This paper examines whether liquidity risk will have an impact on deposits insurance premium. After Basel III issued new liquidity specifications, there are many studies to discuss about the impact of new liquidity regulations on banks. Some studies have shown that even liquidity risk is reduced. It will lead to a decline in the profitability of the bank, so I think this may increase the probability of bank default, then the bank's deposits insurance rate should be raised. My research shows that banks in the US, their liquidity risk indeed affect the deposits insurance premium, and I through find the relationship between credit risk and liquidity risk is negative. To prove its channel is by the credit risk to effect deposits insurance. The result shows that banks with lower liquidity risk should have higher deposits insurance premium.