TY - BOOK ID - 84541784 TI - Financial Opening, Deposit Insurance, and Risk in a Model of Banking Competition AU - Cordella, Tito. AU - Levy Yeyati, Eduardo. PY - 1998 SN - 146239535X 1451988451 1281600849 1451897790 9786613781536 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Banks and Banking KW - Finance: General KW - Financial Risk Management KW - Insurance KW - Asymmetric and Private Information KW - Information and Market Efficiency KW - Event Studies KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Financial Institutions and Services: Government Policy and Regulation KW - Interest Rates: Determination, Term Structure, and Effects KW - General Financial Markets: General (includes Measurement and Data) KW - Insurance Companies KW - Actuarial Studies KW - Banking KW - Finance KW - Economic & financial crises & disasters KW - Insurance & actuarial studies KW - Deposit insurance KW - Deposit rates KW - Competition KW - Financial crises KW - Financial services KW - Financial markets KW - Financial institutions KW - Bank deposits KW - Banks and banking KW - Crisis management KW - Interest rates KW - New Zealand UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541784 AB - This paper studies the impact of competition on the determination of interest rates and banks’ risk-taking behavior under different assumptions about deposit insurance and the dissemination of financial information. It finds that lower entry costs foster competition in deposit rate sand reduce banks’ incentives to limit risk exposure. Although higher insurance coverage amplifies this effect, two alternative arrangements (risk-based contributions to the insurance fund and public disclosure of financial information) help to reduce it. Moreover, uninsured but fully informed depositors and risk-based full deposit insurance yield the same equilibrium risk level, which is independent of entry costs. The welfare implications of the different arrangements are also explored. ER -