The Centre for Economic Policy Research (CEPR) Research Policy Network (RPN) on European Financial Architecture (EFA), organized a Webinar on Deposit insurance - Demon or rescuer: how to deal with the risk of bank runs? on Friday, 21 April 2023, 1:00 p.m. - 2:15 p.m. CET, via Zoom.
Speakers: Viral Acharya, NYU-Stern, NBER & CEPR & Jan Pieter Krahnen, Leibniz Institute SAFE, CEPR and EFA RPN
Commentators: Marie Donnay, European Commission and Martin Oehmke, LSE, CEPR & EFA RPN
Moderator: Elena Carletti, Bocconi University, CEPR, EFA RPN
The recent Silicon Valley Bank (SVB) experience in the U.S, and partly of Crédit Suisse (CS) in Switzerland, act as a wake-up call for Europe’s regulators to raise the question of what we can learn from the turbulent events surrounding SVB’s final days and what they tell us about the performance of existing regulation. This Webinar aimed to discuss the pros and cons of extending deposit insurance to demandable deposits and other runnable short-term liabilities, in order to mitigate bank runs, thereby facilitating orderly resolution. A point of departure of this hypothesis is developed in the SAFE Policy Letter n.98: European Lessons from Silicon Valley Bank resolution: A Plea for a comprehensive demand deposit protection scheme (CDDPS) giving such a broadened insurance coverage an important role in dealing with weak banks/banks exist.