Laeven, Luc2014-02-262014-02-262002-01World Bank Economic Reviewhttps://hdl.handle.net/10986/17187Arguing that a relatively high cost of deposit insurance indicates that a bank takes excessive risks, this article estimates the cost of deposit insurance for a large sample of banks in 14 economies to assess the relationship between the risk-taking behavior of banks and their corporate governance structure. The results suggest that banks with concentrated ownership tend to take the greatest risks, and those with dispersed ownership engage in a relatively low level of risk taking. Moreover, as a proxy for bank risk, the cost of deposit insurance has some power in predicting bank distressen-USCC BY-NC-ND 3.0 IGOACCOUNTINGASSET VALUEASSET VALUESASSET VOLATILITYBAILOUTBANK ASSETBANK CLOSUREBANK CONCENTRATIONBANK CREDITORSBANK DEBTBANK DEBTSBANK DISTRESSBANK EQUITYBANK FAILUREBANK FAILURESBANK INTERVENTIONBANK LIABILITIESBANK MARKETBANK MONITORINGBANK OF KOREABANK REGULATIONBANK REGULATORSBANK RESTRUCTURINGBANK RISKBANK RISK TAKINGBANK RUNSBANKING ASSETSBANKING CRISESBANKING CRISISBANKING MARKETBANKING RISKSBANKING SECTORBANKING SECTOR ASSETSBANKING SYSTEMBANKING SYSTEM STABILITYBANKING SYSTEM VULNERABILITYBANKING SYSTEMSBANKSBASIS POINTSBLANKET GUARANTEEBONDHOLDERSCALL OPTIONCALL OPTIONSCAPITAL FORBEARANCECAPITAL REGULATIONCAPITALIZATIONCITY BANKCITY BANKSCOMMERCIAL BANKCOMMERCIAL BANKSCONCENTRATION RATIOCONSUMER PRICE INDEXCORPORATE GOVERNANCECORPORATE LIABILITIESCOST OF DEPOSIT INSURANCECOST OF INSURANCECOSTS OF DEPOSIT INSURANCECOUNTRY RISKCREDIT BANKCREDIT BANKSCREDIT GROWTHCRISIS COUNTRIESDEBTDEBT ISSUEDEBT LIABILITIESDEBTSDEPOSITDEPOSIT INSURANCEDEPOSIT INSURANCE AGENCYDEPOSIT INSURANCE FUNDDEPOSIT INSURANCE FUNDSDEPOSIT INSURANCE INCREASEDEPOSIT INSURANCE INCREASESDEPOSIT INSURANCE LITERATUREDEPOSIT INSURANCE PREMIUMDEPOSIT INSURANCE PREMIUMSDEPOSIT INSURANCE PRICINGDEPOSIT INSURANCE PRICING SCHEMEDEPOSIT INSURANCE SCHEMESDEPOSIT INSURANCE SERVICESDEPOSIT INSURANCE SYSTEMDEPOSITORDEPOSITOR SAFETYDEPOSITORSDEPOSITORYDEPOSITORY INSTITUTIONSDEPOSITSDERIVATIVE CONTRACTDIVIDENDDIVIDEND YIELDDIVIDEND YIELDSDIVIDENDSDUMMY VARIABLEDUMMY VARIABLESEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING MARKETSENFORCEABILITYEQUITY RETURNSEQUITY VALUEEQUITY VALUESEQUITY VOLATILITYEXCESSIVE RISKSEXPLICIT DEPOSITEXPLICIT DEPOSIT INSURANCEEXPLICIT DEPOSIT INSURANCE SCHEMEEXPLICIT DEPOSIT INSURANCE SCHEMESEXPLICIT INSURANCEFACE VALUEFINANCIAL CRISISFINANCIAL DISTRESSFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIATIONFINANCIAL LIBERALIZATIONFINANCIAL SAFETY NETFINANCIAL SAFETY NETSFINANCIAL SERVICESFINANCIAL STRUCTUREFINANCIAL SYSTEMFINANCIAL SYSTEMSFLAT-RATE PREMIUMSFORECASTING BANK DISTRESSFOREIGN BANKFOREIGN BANK PENETRATIONFOREIGN BANKSFOREIGN ENTRYFOREIGN EXCHANGEGOVERNMENT DEPOSITGOVERNMENT DEPOSIT INSURANCEGOVERNMENT INTERVENTIONGROSS DOMESTIC PRODUCTGROUP LOANGUARANTORHOUSINGIMPLICIT DEPOSIT INSURANCEIMPLICIT INSURANCEINCENTIVE PROBLEMSINFLATIONINFLATION RATEINFLATION RATESINFORMED DEPOSITORSINSURANCE COSTINSURANCE COSTSINSURED BANKINSURED BANKSINSURED DEPOSITSINTEREST RATEINTERNATIONAL BANKINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL STATISTICSLARGE BANKSLAWSLEGAL SYSTEMLEGAL SYSTEMSLEVEL OF RISKLIQUID RESERVESLIQUIDITYLOANLOAN SIZELONG-TERM CREDITMARKET DISCIPLINEMARKET PRICESMARKET STRUCTUREMARKET VALUEMATURITYMODEL DEPOSIT INSURANCEMODEL OF DEPOSIT INSURANCEMONETARY FUNDMORAL HAZARDMORAL HAZARDSMULTINATIONAL BANKSOFFICIAL DEPOSIT INSURANCEOPTION PRICING MODELOPTION-PRICING ESTIMATESOWNERSHIP DATAOWNERSHIP OF BANKSOWNERSHIP STRUCTUREOWNERSHIP STRUCTURESPARTIAL DEPOSIT INSURANCEPORTFOLIOPORTFOLIO RISKPROXY FOR BANK RISKPUT OPTIONPUT OPTIONSRECAPITALIZATIONREGIONAL BANKSREGULATORY FORBEARANCERESTRICTIONS ON ENTRYRETURNRETURN ON ASSETSRISK TAKINGRISK-TAKING BEHAVIOR OF BANKSRISKY BANKSHAREHOLDERSMALL BANKSSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKETSSUBSIDIARYTOTAL DEBTTRADINGTREASURYTURNOVERUNDERLYING ASSETUNINSURED DEBTSVALUE OF ASSETSVALUE OF BANK ASSETSVALUE OF DEPOSITVALUE OF DEPOSIT INSURANCEWEAK BANKSJournal ArticleWorld Bank10.1596/17187