The Travels of a Deposit in Turbulent Times: recent published paper
Dr. Harald Sander, Professor of Economics at MSM and Professor of Economics and International Economics at Technische Hochschule Köln – University of applied Sciences, recently published a co-authored paper titled “The Travels of a Deposit in Turbulent Times: The Importance of Deposit Insurance Design for Cross-Border Deposits".
In this paper, the authors provide an in‐depth investigation of the relationship between the decision of households and companies to deposit their funds in foreign banks and the promise of governments - both at home and abroad - to insure the deposits by means of a public deposit insurance system against losses in case of a bank default.
About the result of this research Dr. Harald Sander mentioned “We find that both the absolute quality of a country’s deposit insurance system – its specific design and its credibility - as well as its relative quality vis‐à‐vis other countries’ deposit insurance systems affect depositor behavior. However, in non-crisis times depositors look “only” for a better insurance abroad. Nevertheless, during systemic banking crises, cross‐border depositors primarily seek countries with the absolute best and most credible protection.” This behavior can lead to substantial relocation of bank deposits during a financial crisis and thus amplify this crisis. This is what happened during the 2008–2009 great financial crisis, when the emergency actions taken by the some governments to rescue banks and maintain their safe havens status, have led to substantial relocations of cross-border deposits.
Economic Inquiry has published the paper with free access. You can find the link to the paper here
Co-authors of the publication “The Travels of a Deposit in Turbulent Times” are:
- Shusen Qi
Assistant Professor of Finance at Xiamen University in Xiamen (China)
- Stefanie Kleimeier
Associate Professor of Finance at Maastricht University (NL)
Professor of Entrepreneurial Finance and Banking at the Open University in Heerlen (NL)
Professor Extraordinary at the University of Stellenbosch Business School (South Africa)
Harald Sander’s research
Harald’s main research areas are European banking market integration, economic integration, trade policy, and the macroeconomics of financial crises. Prof. Sander has published extensively in leading international journals like the Journal of International Money and Finance, the Journal of Banking and Finance, the Journal of Financial Stability, and Applied Economics. He is the author and editor of several books, including a volume on “World Trade after the Uruguay Round” published by Routledge, and a report on “European Retail Banking Market Integration” for the Centre of European Policy Studies.
Please click here to find an overview of all the publications of Harald Sander.
Scientific publications by MSM faculty members
MSM’s faculty members are active in publishing their work in renown scientific journals, books, book chapters. You can explore an overview of MSM’s scientific publications here
Meet MSM’s faculty members: introducing Harald Sander
Paper: Deposit Insurance and Cross-Border Deposits in Times of Banking Crises
Paper on Ethiopia in China's Belt and Road initiative