This thesis focuses on deposit insurance schemes and their relationship to banking crisis. The empirical model used covers 55 developed and developing countries over the period 1970-1989. This study finds that banking crises are closely linked to adverse macroeconomics shocks like economic recessions, financial liberalization, capital account liberalization and short term capital flows, and currency depreciation. External vulnerability (expressed as the ratio of M2 to foreign reserve) is also found to be a key variable. The empirical results also show that deposit insurance increases the probability of banking crises, due to induced moral hazard and adverse selection.


School of Business


Economics Department

Degree Name

MA in Economics

Date of Award

Winter 2-22-2006

Online Submission Date


First Advisor

Rodrigo Seda

Committee Member 1

Ahmed Kamaly

Committee Member 2

Hala El Ramly

Document Type



128 leaves

Library of Congress Subject Heading 1

Deposit banking.

Library of Congress Subject Heading 2



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Creative Commons License

Creative Commons Attribution-No Derivative Works 4.0 International License
This work is licensed under a Creative Commons Attribution-No Derivative Works 4.0 International License.

Call Number

Thesis 2005/109