Sato, Ryuzo
[VerfasserIn]
;
Kang, Bohyong
[Sonstige Person, Familie und Körperschaft];
Ramachandran, Rama V.
[Sonstige Person, Familie und Körperschaft]National Bureau of Economic Research
Risk Adjusted Deposit Insurance for Japanese Banks
Erschienen:
Cambridge, Mass: National Bureau of Economic Research, April 1990
Erschienen in:NBER working paper series ; no. w3314
Umfang:
1 Online-Ressource
Sprache:
Englisch
DOI:
10.3386/w3314
Identifikator:
Reproduktionsnotiz:
Hardcopy version available to institutional subscribers
Entstehung:
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Beschreibung:
The purpose of this paper is to evaluate the Japanese deposit insurance scheme by contrasting the flat insurance rate with a market-determined risk-adjusted rate. The model used to calculate the risk-adjusted rate is that of Ronn and Verrna (1986) . It utilizes the notion of Merton(1977) that the deposit insurance can be based on a one-to-one relation between it and the put option; this permits the application of Black and Scholes(1973) model for the calculation of the insurance rate. The risk adjusted premiums are calculated for the thirteen city banks and twenty-two regional banks. The inter-bank spread in risk-adjusted rates in Japan is found to be as wide as in the United States. But the insurance system is only one component of the safety network for a county's banking system. The difference in the American and Japanese networks is described and its implications for the evaluation of the insurance system is discussed