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http://bura.brunel.ac.uk/handle/2438/29046| Title: | Deposit Insurance and Bank Liquidity Creation: Evidence from a Natural Experiment in China |
| Authors: | Zhou, X Li, X Zhou, Y Kara, A |
| Keywords: | deposit insurance;liquidity creation;China;banks |
| Issue Date: | 2-Jul-2024 |
| Publisher: | Springer Nature |
| Citation: | Zhou, X. et al. (2024) 'Deposit Insurance and Bank Liquidity Creation: Evidence from a Natural Experiment in China', Journal of Financial Services Research, 0 (ahead of print), pp. 1 - 37. doi: 10.1007/s10693-024-00431-z. |
| Abstract: | In this paper, we examine how the implementation of deposit insurance influences the impact of bank capital, excess lending, banking competition and monetary policy on liquidity creation of banks. Our examination uses China’s introduction of deposit insurance in 2015 as a natural experiment. We find that deposit insurance positively reinforces the effect of capital but weakens that of monetary policy on liquidity creation. We do not find that deposit insurance has a significant influence on the effects of excess lending and competition on the liquidity creation of banks. We also show that the implementation of deposit insurance has heterogenous effects on the liquidity creation of large and small banks. |
| Description: | JEL codes G21 • G28 • G38. |
| URI: | https://bura.brunel.ac.uk/handle/2438/29046 |
| DOI: | https://doi.org/10.1007/s10693-024-00431-z |
| ISSN: | 0920-8550 |
| Other Identifiers: | ORCiD: Alper Kara https://orcid.org/0000-0002-8560-0501 |
| Appears in Collections: | Dept of Economics and Finance Research Papers |
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