Economics Commons^™

Romania: Bank Deposit Guarantee Fund, Ezekiel Vergara

Journal of Financial Crises

Following international calls to strengthen deposit-insurance systems during the Global Financial Crisis (GFC), Romanian authorities increased their deposit-insurance coverage from EUR 20,000 to EUR 50,000 (USD 26,800 to USD 67,000) on October 14, 2008, with the change coming into effect the next day. The Fondul de Garantare a Depozitelor Bancare (FGDB), Romania’s existing deposit insurer, implemented it. Membership was mandatory for all banks registered with the National Bank of Romania (NBR), and local branches of foreign banks could apply for supplementary coverage if their home coverage was below EUR 50,000. The FGDB covered most deposit accounts and charged participating institutions …

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, …

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 …

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. …

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 …

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 …

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. …

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 …

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 …

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 …

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 …

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 …

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, …

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.

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) …

Essays On Opioid Related Issues, Minglu Sun

USF Tampa Graduate Theses and Dissertations

Strong empirical evidence points towards a significantly higher prevalence of opioid consumption among people receiving disability benefits (DB) than in the general population of the United States. However, no previous research established a causal relationship between the decision to award DB to applicants and their subsequent opioid use. We aim to contribute towards filling this gap. There are channels through which awarding DB may both increase and depress opioid consumption, and thus, ex-ante, the sign of a potential causal relationship is ambiguous. To correct for the treatment endogeneity, since an individual’s age at the time of the decision on an …

Publication Dynamics: What Can Be Done To Eliminate Barriers To Publishing Full Manuscripts By The Postgraduate Trainees Of A Low-Middle Income Country?, Hafsa Majid, Lena Jafri, Sibtain Ahmed, Muhammad Abbas Abid, Mohammad Aamir, Aamir Ijaz, Aysha Habib Khan, Imran Siddiqui

Department of Pathology and Laboratory Medicine

Objectives: This study aimed to determine the publication rate of free paper abstracts presented by the postgraduate (PG) trainees and determine the reasons for non-publication. A mixed methods study was conducted. PG trainees presenting free papers at the at the Pakistan Society of Chemical Pathologist conferences from 2012 to 2018 were included. Three databases were searched to identify if the abstracts were published or not. The PG trainee authors of abstracts not published as full manuscript, were surveyed to determine the barriers and challenges in publishing a manuscript.
Results: The average rate of full manuscript publication was 51.8% (n = …

The Outdoor Recreation Economy In The Mountain West, 2020, Miguel Soriano Ralston, Joshua Padilla, Peter Grema, Caitlin J. Saladino, William E. Brown Jr.

Economic Development & Workforce

This fact sheet provides select data from the State Outdoor Recreation Satellite Account (ORSA) at the Bureau of Economic Analysis (BEA) on the 2020 outdoor recreation economy in the Mountain West region, including Nevada, Utah, Arizona, New Mexico, and Colorado.

Return Migration, Human Capital, And Labor Outcomes, Avinandan Chakraborty

Economics ETDs

This dissertation is a collection of chapters that demonstrate the relationship between return migration, human capital, and labor outcomes in the origin developing countries. Return migration is an intrinsic part of the cycle of international migration and development. Migrants acquire new skills, accumulate human capital and savings during their stay abroad. When they return, this accumulated capital may generate benefits for the left behind family members but may also affect their reintegration into the labor markets in the origin countries.

In my first chapter, I estimate the effect of a return migrant in the household on the schooling outcomes of …

Common Ownership In Labor Markets, José Azar, Yue Qiu, Aaron Sojourner

Upjohn Institute Working Papers

In this paper, we study common ownership in U.S. labor markets, and document that common ownership more than doubled over the period 1999–2017. To identify the causal effects of common ownership on labor market outcomes, we use a firm’s addition to the S&P 500 index as a shock to the common ownership of its competitors in local labor markets. Using a matched difference-in-differences analysis, we find that, after a firm enters the S&P 500 index, the average annual earnings per employee of its local competitors decrease relative to the counterfactual. The effect of S&P 500 index additions on employee earnings …

Leadership And Human Resource Management During Crisis, Ghenwa Al Hakim, Bettina Lynda Bastian, Madonna Salameh Ayanian, Nada Sarkis

Arab Economic and Business Journal

The present paper investigates the role of leadership and human resource management (HRM) in times of crisis. The analysis is situated within the context of Lebanon which is facing the challenges of the COVID-19 pandemic whilst undergoing a devastating economic crisis and downturn. Based on 23 interviews with managers, the paper recognizes attributes of effective leadership in a crisis management approach, as well as the role that the HRM plays in driving employee and organizational performance despite external challenges. In this context, several leadership and HRM practices in response to crisis are identified and discussed.

Protecting The Sovereign's Money Monopoly, Gary B. Gordon, Jeffery Zhang

Law & Economics Working Papers

Sovereign states have had a monopoly over the production of circulating currencies for well over a century. Governments, not private entities, issue circulating currencies. Indeed, in 1986, Milton Friedman and Anna Schwartz declared that “[t]he question of government monopoly of hand-to-hand currency is likely to remain a largely dead issue.” The advent of stablecoins—privately issued digital money that are pegged to fiat currencies like the U.S. dollar or the Euro—raises the question of the money monopoly from the grave.

Why did sovereign money monopolies come into existence in the 19th and 20th centuries? Should circulating private money coexist once again …

Three Essays On Student Enrollment Responses To General Household And Education-Specific Assistance Programs, Usamah Wasif

Economics ETDs

Greater educational attainment is associated with an increase in expected income, lowering of internal discount rates, and improved financial and health literacy. Income transfers have the potential to positively impact educational attainment by either reducing the direct cost of college attendance or by inducing an income effect that nudges students to decrease labor supply and devote greater time to studies. Whether assistance leads to more education depends on the circumstances, particularly the educational stage and assistance type. High school students may react differently to assistance relative to college students and both may react differently to general household income transfers compared …

Project Cash-Flow Risk Resolution And Project Value, Ralph W. Sanders Jr.

School of Business and Leadership Working Papers

I examine the effects of cash-flow risk resolutions on project valuation by deriving risk-resolution-scenario-specific "families" of capital structure relations (i.e., equations for the value of the levered firm, return on levered equity, and marginal cost of capital). Although I obtain Modigliani and Miller’s family of relations only as highly constrained special cases reflecting "risk-free" cash flows, I find that their qualitative insights into firm value and leverage in the presence of corporate taxes are robust across the cash-flow risk resolution scenarios examined. More practically, I find that analysts will correctly value a scale enhancing project (i.e., a project of the …