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Premium for implicit deposit insurance within Russian state banks
https://doi.org/10.32609/0042-8736-2021-10-89-112
Abstract
Deposit insurance system (DIS) exists for 17 years in Russia. The major deposit market share belongs to state banks. Ordinary depositors may perceive the status of the bank state ownership to reflect additional deposit safety, even in the excess of the DIS limits. Such a situation is called an “implicit deposit insurance” in the literature. By offering a sort of implicit deposit insurance services state banks might underprice the deposits in excess of DIS limits compared to the private banks. We utilize data from the open sources to measure the scale of the implicit deposit insurance pricing in Russian state banks. We have revealed that Russian state banks pay extra premium all other things being equal. More specifically, the premium is larger in the smallest and the largest state banks, than in the medium-sized ones. Thus, we claim that the implicit insurance premium has a U-shaped form for Russian state banks depending on their asset size. However, Russian state banks underprice all deposits all other things being equal. Additionally, we find out that IRB banks in Russia are more prone to set up higher deposit rates when they take on more risks, than non-IRB banks.
About the Author
H. I. Penikas
https://www.hse.ru/staff/penikas
Bank of Russia; HSE University; P. N. Lebedev Physics Institute, Russian Academy of Sciences
Russian Federation
Bank of Russia; HSE University; P. N. Lebedev Physics Institute, Russian Academy of Sciences
Russian Federation
Henry I. Penikas
Moscow
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For citations:
Penikas H.I. Premium for implicit deposit insurance within Russian state banks. Voprosy Ekonomiki. 2021;(10):89-112. (In Russ.) https://doi.org/10.32609/0042-8736-2021-10-89-112
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