Private Insurance Against Banking Crises

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Insurance contracts contingent on macroeconomic shocks or on average bank capital could be a way of insuring against systemic crises. With insurance, banks are recapitalized when negative events would otherwise cause a write-down of capital, or even bank insolvency. In particular, we are concerned with the following issues:

  • Will banking crises be avoided by fair risk premia in loan provision or deposit insurance?
  • Can banking crises be avoided by private insurance schemes?
  • How can or should private insurance be organized?
  • Which type of indicators of the financial health of the banking sector should be used in insurance contracts?
  • How does financial intermediation contingent on macroeconomic events affect risk-allocation and the probability of banking crises?
  • Can Crisis Contracts help to avoid banking crises?


  • Preventing Banking Crises - with Private Insurance? CESifo Economic Studies, 2013, doi: 10.1093/cesifo/ifs043.
    (Hans Gersbach)
  • Do Risk Premia Protect from Banking Crises?, Macroeconomic Dynamics, 12, 2008, 100-111.
    (Hans Gersbach and Jan Wenzelburger)
    Working Paper Version

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