Business Commons^™

Portugal: Deposit Guarantee Fund, Kaleb B. Nygaard

Journal of Financial Crises

On November 3, 2008, the Portuguese government, through a formal legal decree, increased the country’s deposit insurance coverage from EUR 25,000 to EUR 100,000 (USD 31,750 to USD 127,000). The decree came in response to the Global Financial Crisis and a European Union recommendation that all member states increase their deposit coverage to at least EUR 50,000. Portugal’s deposit-guarantee fund, the Fundo de Garantia de Depósitos (or FGD in Portuguese), had existed since 1992. In 2010, the fund was called upon to cover approximately EUR 100 million in deposits of the failed commercial bank Banco Privado Português, S.A., which had …

Philippine Deposit Insurance Corporation, Lily S. Engbith

Journal of Financial Crises

At the height of the Global Financial Crisis in October 2008, moves by other countries to expand the scope of their bank deposit insurance led the Philippine government to consider similar measures. Unlike most countries, however, the government did not make the changes immediately. After a lengthy legislative process, the President signed a bill on April 29, 2009, doubling the Philippine Deposit Insurance Corporation’s (PDIC’s) coverage from PHP 250,000 to PHP 500,000 (about USD 5,300 to USD 10,600) per depositor, with any losses in excess of PHP 250,000 covered by the national government. The changes took effect on June 1, …

Malaysia: Government Deposit Guarantee, Ezekiel Vergara

Journal of Financial Crises

On October 16, 2008, following the collapse of Lehman Brothers and regional expansions of deposit insurance, Malaysia announced its Government Deposit Guarantee (GDG), an unlimited guarantee of deposits held at eligible institutions. Given the “soundness and strong capitalization” of the banking sector, the preemptive program was meant “to maintain the stability of the Malaysian financial system.” Prior to the crisis, the Perbadanan Insurans Deposit Malaysia (PIDM), Malaysia’s deposit-insurance agency, guaranteed up to MYR 60,000 (USD 17,291) per depositor per insured institution. The PIDM was tasked with administering the GDG. Under the GDG, the PIDM insured all ringgit and foreign-currency deposits. …

New Zealand: Crown Retail Deposit Guarantee Scheme, Ezekiel Vergara

Journal of Financial Crises

The collapse of Lehman Brothers in 2008 led to a global financial crisis. Leaders of the G-7 countries agreed on October 10, 2008, to five principles for addressing the crisis, including the need for sound deposit insurance. On October 12, Australia’s prime minister announced a deposit insurance program that his government had first publicly vetted in June. Anticipating Australia’s announcement, New Zealand’s prime minister announced its own deposit guarantee scheme on the same afternoon. The government launched the Crown Retail Deposit Guarantee Scheme (the Scheme) “to ensure ongoing retail depositor confidence in New Zealand’s financial system, given turbulence in the …

Association For The Guarantee Of Deposits Luxembourg, Ezekiel Vergara

Journal of Financial Crises

During the Global Financial Crisis (GFC), Luxembourgish officials in October 2008 announced plans to raise the country’s deposit-insurance cap to EUR 100,000 (USD 134,000) and eliminate co-insurance. Prior to the GFC, Luxembourg’s deposit-insurance system covered 90% of deposits in eligible accounts up to EUR 22,222, with depositors responsible for the remaining 10%. On December 19, 2008, the legislature increased the cap to EUR 100,000 and removed the co-insurance, effective January 1, 2009. The Association Pour la Garantie des Dépôts Luxembourg (AGDL), a private deposit-insurance body, administered these changes. All deposit-taking institutions and approved investment firms, except branches of foreign banks, …

Latvia: Deposit Guarantee Fund, Ezekiel Vergara

Journal of Financial Crises

During the Global Financial Crisis (GFC), Latvian authorities raised the country’s deposit-insurance cap from EUR 20,000 to EUR 50,000 (USD 26,800 to USD 67,000) in response to international calls to bolster deposit-insurance systems. They passed the measure on October 16, 2008, and it came into effect two days later. The Financial and Capital Market Commission (FCMC), Latvia’s prudential supervisor and existing deposit administrator, oversaw the guarantee. The FCMC covered most types of deposit accounts and insured all Latvian-registered deposit-taking institutions, including some foreign-bank branches operating in Latvia. The FCMC charged quarterly premiums on insured accounts and could levy additional fees …

Kuwait: Unlimited Deposit Guarantee, Sharon M. Nunn

Journal of Financial Crises

On October 26, 2008, at the height of the Global Financial Crisis, the Central Bank of Kuwait (CBK) announced that it would support Gulf Bank, the country’s third-largest bank, which had sustained losses on clients’ derivatives trades. In the same announcement, it said it would ask the government to guarantee all banking deposits to shore up confidence in banks and to keep Kuwait’s banking system competitive with those of other countries, including neighboring Saudi Arabia and the United Arab Emirates, which had already announced unlimited deposit guarantees. The legislature passed an unlimited deposit guarantee bill eight days later. Kuwait did …

Indonesia Deposit Insurance Corporation, Lily S. Engbith

Journal of Financial Crises

To address the risk of capital flight to neighboring countries during the Global Financial Crisis, the Indonesian government raised the limit on insured deposits 20-fold from IDR 100 million to IDR 2 billion per account (about USD 200,000). The President issued two government regulations on October 13, 2008. The first was an emergency decree that authorized the government, in consultation with the Indonesian Parliament, to alter the limit in times of systemic financial distress. The second was a government regulation enacting the actual increase, which has remained in effect since the crisis. All banks operating within Indonesia, including branches of …

Iceland: Depositors’ And Investors’ Guarantee Fund, Adam Kulam

Journal of Financial Crises

Leading up to the Global Financial Crisis of 2007–2009, Iceland’s three largest banks accumulated assets totaling several times the size of Iceland’s GDP and financed their growth through foreign borrowing. As wholesale funding dried up in 2007, they replaced this borrowing by rapidly gathering deposits through foreign branches and subsidiaries located in the European Union, primarily in the United Kingdom and the Netherlands. In the summer and fall of 2008, international credit markets froze and the Icelandic banks were unable to roll over their maturing liabilities. On October 6, Prime Minister Geir Haarde announced a full guarantee of domestic deposits. …

Hungary: National Deposit Insurance Fund, Zijin (Phoebe) Lei, Ezekiel Vergara

Journal of Financial Crises

At the height of the Global Financial Crisis (GFC), Hungary announced changes to its deposit-insurance system on October 8, 2008. The government said that it would increase the deposit-insurance cap from HUF 6 million to HUF 13 million (about USD 31,000 to about USD 68,000), the equivalent of roughly EUR 50,000 (about USD 68,000), in line with a European Union (EU) recommendation. Hungary’s finance minister also announced that the state would temporarily provide an unlimited deposit guarantee, following the actions of several European countries. The unlimited guarantee was political, meaning it was not implemented through official legislation. It was effective …

Hong Kong Sar: Full Deposit Guarantee, Ezekiel Vergara, Lily S. Engbith

Journal of Financial Crises

Following a run on Hong Kong’s fifth-biggest bank in September 2008, the Hong Kong government announced that it would use its Exchange Fund to extend full insurance temporarily to depositors at approved banks. The existing Deposit Protection Scheme (DPS) would continue to insure the first 100,000 Hong Kong dollars (HKD; about USD 13,000) per depositor at each bank; the new program would cover the rest. It also covered a broader set of institutions. The Hong Kong Monetary Authority (HKMA) administered the program, overseen by the Hong Kong Deposit Protection Board (HKDPB); the HKMA was also responsible for managing the Exchange …

Greece: Hellenic Deposit Guarantee Fund, Lily S. Engbith

Journal of Financial Crises

Responding to general financial and economic volatility during the Global Financial Crisis (GFC), the Greek government in November 2008 sought to shore up public confidence in the banking system by raising the deposit-insurance limit from EUR 20,000 to EUR 100,000 (127,000 USD) per depositor for three years. The Hellenic Deposit Guarantee Fund (HDGF) was responsible for administering this adjustment, which was accompanied by a fivefold increase in the percentages used for calculating member institutions’ annual contributions. All credit institutions that were authorized to operate in Greece, including branches of foreign banks without their own coverage, were required to participate in …

France: Deposit Guarantee Fund, Ezekiel Vergara

Journal of Financial Crises

In October 2008, during the Global Financial Crisis (GFC), European Union (EU) officials urged member states to raise their minimum deposit-insurance coverage to at least EUR 50,000 (USD 68,000) to promote confidence in banks. France did not need to increase its deposit-insurance cap to meet this target, as it already guaranteed EUR 70,000. The following year, EU officials passed a directive that required all member states to permanently increase their minimum deposit-insurance coverage to EUR 100,000 by December 31, 2010. French authorities complied with the EU’s directive on September 29, 2010. The Fonds de Garantie des Dépôts (FGD), a private …

Belgium: Protection Fund/Special Protection Fund, Adam Kulam

Journal of Financial Crises

At the height of the Global Financial Crisis (GFC) in fall 2008, the Belgian government increased the coverage limits of its deposit guarantee to restore faith in its banking system, protect savers and depositors, and safeguard financial stability. Belgium joined the European Union’s (EU) efforts to strengthen deposit guarantee systems. The measures complemented the Belgian government’s other efforts to secure domestic banks. The government implemented the emergency measures in October and November 2008 through royal decrees, which Parliament later incorporated into law. In a five-week span, Belgian authorities increased the deposit guarantee from EUR 20,000 to EUR 100,000 (USD 26,820 …

Brazil: Time Deposits With Special Guarantee, Sharon M. Nunn

Journal of Financial Crises

Uncertainty from the Global Financial Crisis spread to the Brazilian financial system in 2008, triggering a flight to quality toward assets with explicit or implicit government guarantees. In the Brazilian context, this meant depositors pulled funds from small and medium-size banks and parked them in larger banks that investors believed the government was more likely to backstop. The National Monetary Council (CMN) created the Time Deposits with Special Guarantee program (DPGE) in March 2009 to bolster liquidity in small and medium-size banks. The CMN put the country’s existing deposit insurer, the Credit Guarantee Fund (FGC), in charge of administering the …

Austria: Unlimited Deposit Guarantee, Sharon M. Nunn

Journal of Financial Crises

After Germany and Ireland implemented unlimited deposit guarantees, Austrian officials passed a law on October 26, 2008, that removed deposit-insurance limits for individual depositors, fearing that Austrians would move their money to countries with higher deposit coverage. The government established the program using the country’s existing, mandatory deposit-insurance system (DIS), which was private, ex post funded, and segmented into sectoral schemes that covered different kinds of financial institutions. During payouts, the schemes covered the first EUR 50,000 (USD 67,000) of guaranteed funds to a given depositor, and the government the government covered the rest. The government required all financial institutions …

Broad-Based Emergency Liquidity Programs, Rosalind Z. Wiggins, Sean Fulmer, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

In this paper, we analyze broad-based emergency liquidity (BBEL) programs. Our main purpose is to assist policymakers who are considering establishing a BBEL program in designing the most effective program possible as efficiently as possible. Our insights are derived from 33 case studies the Yale Program on Financial Stability produced and existing literature on the topic.

Liquidity provision is a long-established mandate of central banks and was a function that private entities performed even before the establishment of central banks. We survey a sampling of cases from the 19th through 21st centuries, drawn from 10 countries and regions, to distill …

Australia: Financial Claims Scheme, Ezekiel Vergara

Journal of Financial Crises

Following the collapse of Lehman Brothers on September 15, 2008, the Australian government intervened in its own banking system, both to support domestic depositors and to keep its banking system competitive with those in countries whose regulators had already intervened. On October 12, 2008, the Australian government announced the Financial Claims Scheme (FCS) to insure bank depositors. The deposit guarantee automatically insured depositors at all authorized deposit-taking institutions and covered a range of deposit accounts. As initially announced, the FCS would provide a blanket guarantee to all depositors with no fee for participation. This blanket guarantee, however, prompted a migration …

Market Support Programs: Covid-19 Crisis, June Rhee, Lily S. Engbith, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper is an analysis of important considerations for policymakers seeking to establish a market support program (MSP). Our main purpose is to assist policymakers who have already made the decision to use an MSP in designing the most effective program possible. Our insights derive from 23 case studies the Yale Program on Financial Stability produced and existing literature on the topic.

By the onset of the Global Financial Crisis (GFC), market-based finance and traditional banking systems were significantly intertwined, and the panic in market-based finance threatened to spread quickly to both traditional banks and the real economy. In response, …

Dividends And Bank Capital In The Global Financial Crisis Of 2007–2009, Viral V. Acharya, Irvind Gujral, Nirupama Kulkarni, Hyun Song Shin

Journal of Financial Crises

The headline numbers appear to show that even as banks and financial intermediaries suffered large credit losses in the Global Financial Crisis of 2007–2009, they raised substantial amounts of new capital, both from private investors and from government-funded capital injections. However, on closer inspection, the composition of bank capital shifted radically from one based on common equity to that based on debt-like hybrid claims such as preferred equity and subordinated debt. The erosion of common equity was exacerbated by large-scale payments of dividends, in spite of widely anticipated credit losses. Dividend payments represent a transfer from creditors (and potentially taxpayers) …

Account Guarantee Survey, Christian M. Mcnamara, Adam Kulam, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 27 account guarantee (AG) programs across 14 Key Design Decisions. The main themes that emerge are: (a) the importance of considering the effects of AG programs on other parts of the financial system or other jurisdictions, (b) the ability to address moral hazard through heightened supervision, which removes a potential obstacle to adopting AG programs in response to the acute phase of crises, (c) the necessity of developing guarantees that are credible and timely, and (d) the need to design standing AG programs with an eye toward how they will function during crises.

The Relationships Among Locus Of Control, The Impostor Phenomenon, And Math Anxiety In Business Majors, Tiffany L. S. Tovey, Stephanie Kelly, Wiley Brown

International Journal for Business Education

The importance of quantitative literacy in business education cannot be overstated. A barrier to enhancing quantitative skills for many business majors is their math anxiety, an angst some individuals experience when working with numbers. This study explored the relationship between math anxiety, locus of control, and impostor phenomenon in business students. 220 business students (undergraduate and graduate) from a two moderately sized southeastern universities in the United States participated in an online survey that assessed these three phenomena. A linear regression was run to understand the relationships among the variables. The results indicated that more than one fifth of math …

Privacy Rights Pertaining To The Developing Cyber World We Live In, Alexis Nixon

Graduate Scholarly Works

A large concern expressed by the general public is the right to privacy when dealing with the cyber/online sector. One major factor that influences the privacy rights of people in the cyber realm is our fourth amendment in the United States. In this paper, the focus will be on the fourth amendment, privacy rights and how these pertain to the cyber world of individuals, companies and countries. Some of the points covered in the sections below include: an explanation of the fourth amendment, influential court case pertaining to the fourth amendment, companies right to privacy/ keeping their customers data private, …

Factors Influencing The Adoption Of Smart-Home Appliances: Users' Perspectives, Prakash Shahi

Dissertations

Smart appliances will be a significant part of the annual $300 billion smart-home market by 2025. Their use is expected to grow at a compounded annual growth rate of 31% for the foreseeable future. Currently, 12-16% of households use smart-home products in the U.S., including thermostats, TVs, refrigerators, coffee machines, garage door openers, and vision-equipped doorbells. Smart appliances provide significant benefits to us over traditional appliances. Smart appliances simplify our lives by automating various tasks in our homes and allowing us to monitor and control them remotely from our offices, grocery stores, and wherever we may be.

Despite the usefulness …

The Effect Of Competence And Independence On Fraud Detection (Empirical Study At The West Java Representatives Of The Audit Board Of The Republic Of Indonesia), Nenden Indriani, Poppy Sofia Koeswayo, Cahya Irawady

Journal of Accounting Auditing and Business

This research examines whether good auditor competence and independence affect fraud detection by the West Java representatives of the Audit Board of the Republic of Indonesia. The population in this research was the auditors of the West Java representatives of the Audit Board of the Republic of Indonesia. The purposive sampling technique was used to obtain 106 auditors of the Audit Board of the Republic of Indonesia. The data for this research were obtained from primary data through a questionnaire. Multiple. Linear regression analysis. It was used to analyze the data in the study. The regression. The coefficient of the …

Factors Affecting Village Financial Management Accountability, Opik Taufik, Syafrizal Ikram

Journal of Accounting Auditing and Business

This study aims to analyze the effect of human resource competence and organizational commitment on the use of information technology and its impact on village financial management accountability. This study uses a quantitative approach. The population in this study are villages in Tasikmalaya Regency. This study used the proportional sampling method with a total sample of 187 respondents. The sample of this study consisted of village heads, village secretaries, heads of administrative and general affairs, heads of government sections, and heads of financial affairs from 187 villages in Tasikmalaya Regency. The data collection method is distributing questionnaires measured by a …

Distinguishing Unpredictability From Uncertainty In Entrepreneurial Action Theory, Ryan W. Angus, Mark D. Packard, Brent B. Clark

Marketing & Entrepreneurship Faculty Publications

The traditional view that perceived and archival uncertainty measures are substitutable proxies for “true” environmental (entrepreneurial) uncertainty presumes an “all-seeing eye.” Adopting a representationalist epistemology, we distinguish environmental (objective) unpredictability from entrepreneurs’ subjective uncertainty, which has so far been theoretically confounded. It is, in fact, possible for an entrepreneur to be highly certain despite excessive unpredictability and vice versa. Theoretically distinguishing these constructs has fundamental implications for entrepreneurial action theory. For example, because intentional action is consciously originated, unpredictability influences action only indirectly, while uncertainty has direct effects. Outcomes, on the other hand, are directly affected by the complexity and …

Career Satisfaction Antecedents Of Professional Accounting Returnees In International Workplaces: An Employee Experience Perspective, Nga Thi Thuy Ho, Hung Trong Hoang, Pi-Shen Seet, Janice Jones, Nhat Tan Pham

Research outputs 2014 to 2021

Purpose

The purpose of this study is to examine the determinants of career satisfaction of professional accounting returnees who have studied and/or worked abroad and then returned to work in different types of international workplaces in their home country.

Design/methodology/approach

A survey of professional accounting returnees in Vietnam was undertaken and multiple regression analysis was applied to test the proposed relationships.

Findings

This study finds that career satisfaction is affected by career fit, career sacrifice, types of international workplaces (domestically headquartered firms versus globally headquartered firms) and cross-cultural work readjustment. Further, cross-cultural work readjustment partially mediates the effect of career …

Does Finance Make Us Less Social?, Henrik Cronqvist, Mitch Warachka, Frank Yu

Business Faculty Articles and Research

Informal risk sharing within social networks and formal financial contracts both enable households to manage risk. We find that financial contracting reduces participation in social networks. Specifically, increased crop insurance usage decreased local religious adherence and congregation membership in agricultural communities. Our identification utilizes the Federal Crop Insurance Reform Act of 1994 that doubled crop insurance usage nationally within a year, although changes in usage varied across counties. Difference-in-difference and Spatial First Difference tests confirm that households substituted insurance for religiosity. This substitution was associated with reductions in crop diversification and crop yields, indicating an increase in moral hazard.

Experimental Studies On Prosocial, Divisive And Discriminatory Behavior, Chen Zhang

Lingnan Theses (MPhil & PhD)

My PhD thesis contains three experiments: two of them studying prosocial and divisive behavior, guided by Tirole’s (2021) models, and the third studying discriminatory behavior. The first study investigates how people's prosociality changes as public spheres expand. Utilizing the advancement of information technologies, states have begun to introduce social scores to rate and publicize some behaviors in social interactions. With social scores, social interactions are thus divided into a public sphere, which is publicly observable, and a private sphere, which is not. Guided by Tirole’s (2021) model, we experimentally investigate whether social scores promote cooperation in a population with repeated, …