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Financial inclusion for financial stability : access to bank deposits and the growth of deposits in the Global Financial Crisis, Volume 1
 
Author:Han, Rui; Melecky, Martin; Country:World;
Date Stored:2013/08/19Document Date:2013/08/01
Document Type:Policy Research Working PaperSubTopics:Access to Finance; Emerging Markets; Debt Markets; Banks & Banking Reform; Deposit Insurance
Language:EnglishRegion:The World Region
Report Number:WPS6577Collection Title:Policy Research working paper ; no. WPS 6577
Volume No:1  

Summary: In crisis times, depositors get anxious, can run on banks, and withdraw their deposits. Correlated withdrawals of bank deposits could be mitigated if bank deposits are more diversified, that is, held by more individuals. This paper examines the link between the broader access to bank deposits prior to the 2008 crisis and the dynamics of bank deposit growth during the crisis, while controlling for relevant covariates. Employing proxies for access to deposits and the use of bank deposits, the authors find that greater access to bank deposits can make the deposit funding base of banks more resilient in times of financial stress. Policy efforts to enhance financial stability should thus not only focus on macroprudential regulation, but also recognize the positive effect of broader access to bank deposits on financial stability.

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