Deposit Insurance as Private Club : Is Germany a Model?

Beck, Thorsten

World Bank, Washington, DC

关键词: ACCOUNTABILITY;    ACCOUNTING;    ADVERSE SELECTION;    AGENTS;    AUDITING;   

DOI  :  10.1596/1813-9450-2559
RP-ID  :  WPS2559

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author describes, and evaluates thedeposit insurance scheme set-up by private commercial banksin Germany in 1975. The scheme's funding, andmanagement are completely private, with no pubicsupervision. Where other schemes rely on monitoring bydepositors to decrease moral hazard problems, the Germanscheme relies on peer monitoring by its member banks. Thesystem has weathered several small bank crises, but has notyet been exposed to a major bank failure, or a systemiccrisis. To what extent can it serve as a model for othercountries? The success of the German scheme has to be judgedagainst an institutional environment that fosters contractenforcement, and the rule of law, and discouragescorruption. In a country with weaker institutions, thevoluntary membership might quickly lead to adverseselection, with strong banks leaving the scheme. The highcoverage limit might induce bank managers, and owners toabuse the scheme. Banks might intentionally under-fund thescheme, counting on additional government resources in timesof crisis. And the secrecy of funds might decrease fundmanagers' accountability in societies with littletransparency, and much corruption. In Germany's highlyconcentrated commercial banking sector, the small number ofbanks facilitates a club atmosphere, and quick resolution ofbanking crises. But it could also prevent the entry of new,innovative market participants, so that the club becomes acartel. Germany's anti-bankruptcy bias might helpprevent moral hazard, but can also stifle entrepreneurship.There is a tradeoff between the efficiency gain of aprivately run deposit insurance scheme, and its potentiallynegative impact on competition, and entrepreneurship.Although the scheme cannot easily be transplanted todeveloping countries, it offers lessons for other economies.Schemes with a club-like character, reinforce peermonitoring, and minimize the risk of free riding. Risk-basedpremiums, based on auditing by the deposit insurance scheme,create a healthy link between the protection an insuranceoffers, and the moral hazard it aims to prevent. Onecompromise might be a combination of ex-ante funding, thatguarantees credibility, with depositors, and ex-post bankfunding, that gives banks an incentive to monitor oneanother to minimize costs.