金融机构管理习题答案019.docx
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金融机构管理习题答案019.docx
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金融机构管理习题答案019
ChapterNineteen
DepositInsuranceandOtherLiabilityGuarantees
ChapterOutline
Introduction
BankandThriftGuarantyFunds
∙TheFDIC
TheCausesoftheDepositoryFundInsolvencies
∙TheFinancialEnvironment
∙MoralHazard
PanicPreventionversusMoralHazard
ControllingDepositoryInstitutionRiskTaking
∙StockholderDiscipline
∙DepositorDiscipline
∙RegulatoryDiscipline
Non-U.S.DepositInsuranceSystems
TheDiscountWindow
∙DepositInsuranceversustheDiscountWindow
∙TheDiscountWindow
OtherGuarantyPrograms
∙NationalCreditUnionAdministration
∙Property-CasualtyandLifeInsuranceCompanies
∙TheSecuritiesInvestorProtectionCorporation
∙ThePensionBenefitGuarantyCorporation
Summary
SolutionsforEnd-of-ChapterQuestionsandProblems:
ChapterNineteen
1.Whatisacontagiousrun?
Whataresomeofthepotentiallyseriousadversesocialwelfareeffectsofacontagiousrun?
DoalltypesofFIsfacethesameriskofcontagiousruns?
Acontagiousrunisanunjustifiedpanicconditioninwhichliabilityholderswithdrawfundsfromadepositoryinstitutionwithoutfirstdeterminingwhethertheinstitutionisatrisk.Thisactionusuallyoccursatatimethatasimilarrunisoccurringatadifferentinstitutionthatisatrisk.Thecontagiousrunmayhaveanadverseeffectonthelevelofsavingsthatmayaffectwealthtransfers,thesupplyofcredit,andcontrolofthemoneysupply.Depositoryinstitutionsandinsurancecompaniesfacethemostseriousriskofcontagiousruns.
2.Howdoesfederaldepositinsurancehelpmitigatetheproblemofbankruns.WhatotherelementsofthesafetynetareavailabletobanksintheU.S.?
Bankrunsarecostlytosocietysincetheycreateliquidityproblemsandcanhaveacontagioneffect.Becauseofthefirst-come,first-servenatureofdepositliabilities,bankdepositorshaveincentivestorunonthebankiftheyareconcernedaboutthebank'ssolvency.Asaresultoftheexternalcostofbankrunsonthesafetyandsoundnessoftheentirebankingsystem,theFederalReservehasputintoplaceasafetynettoremovetheincentivestoundertakebankruns.TheprimarypiecesofthissafetynetaredepositinsuranceandotherguarantyprogramsthatprovideassurancethatfundsaresafeevenincaseswhentheFIisinfinancialdistress.Otherelementsofthefederalsafetynetareaccesstothelenderoflastresort(discountwindowborrowing),reserverequirements,andminimumcapitalguidelines.
3.WhatmajorchangesdidtheFinancialInstitutionsReform,Recovery,andEnforcementActof1989maketotheFDICandtheFSLIC?
TheFIRREAACTof1989closeddowntheFSLIC,theagencythatusedtoprovidedepositinsurancetosavingsandloanassociations(S&Ls).TheresponsibilityofprovidinginsurancetotheS&LswastransferredtotheFDIC,whichmanagesitthroughaseparateprogram,theSavingsandInsuranceFund.
4.Contrastthetwoviewson,orreasonswhy,depositoryinstitutioninsurancefundsbecameinsolventinthe1980s.
Oneviewisthatinsolvencycanbeexplainedbyexternaleventsinthefinancialenvironmentsuchastheriseininterestratesandoilpricesthattookplaceintheearly1980s.Theotherviewisthatdepositinsurancebringsaboutthetypesofbehaviorthatleadtoeventualinsolvency.Inparticular,depositinsurancecontributestothemoralhazardproblemwherebybankownersandmanagerswereinducedtotakeonriskyprojectsbecausethepresenceofdepositinsurancesubstantiallyreducedtheadverseconsequencestothedepositorsofsuchbehavior.
5.Whatismoralhazard?
Howdidthefixed-ratedepositinsuranceprogramoftheFDICcontributetothemoralhazardproblemofthesavingsandloanindustry?
Whatotherchangesinthesavingsassociationenvironmentduringthe1980sencouragedthedevelopinginstabilityoftheindustry?
Moralhazardoccursinthefinancialinstitutionindustrywhentheprovisionofdepositinsuranceorotherliabilityguaranteesencouragestheinstitutiontoacceptassetrisksthataregreaterthantherisksthatwouldhavebeenacceptedwithoutsuchliabilityinsurance.
Thefixed-ratedepositinsuranceadministeredbytheFDICcreatedamoralhazardproblembecauseitdidnotdifferentiatebetweentheactivitiesofriskyandconservativelendinginstitutions.Consequently,duringperiodsofrisinginterestrates,S&Lsholdingfixed-rateassetswerefindingitincreasinglydifficulttoobtainfundsatlowerrates.Sincethedepositswereinsured,managersfounditeasiertoengageinriskyventuresinordertooffsetthelossesontheirfixed-rateloans.Inaddition,asthenumberoffailuresincreasedinthe1980s,regulatorsbecamereluctanttoclosedownbanksbecausethefundwasbeingslowlydepleted.Thecombinationofexcessiverisk-takingtogetherwithaforbearancepolicyfollowedbytheregulatorsledtotheS&Lcrisis.
6.Howdoesarisk-basedinsuranceprogramsolvethemoralhazardproblemofexcessiverisktakingbyFIs?
Isanactuariallyfairpremiumfordepositinsurancealwaysconsistentwithacompetitivebankingsystem?
Arisk-basedinsuranceprogramshoulddeterbanksfromengaginginexcessiverisk-takingaslongasitispricedinanactuariallyfairmanner.Suchpricingcurrentlyisbeingpracticedbyinsurancefirmsintheproperty-casualtysector.However,sincethefailureofcommercialbankscanhavesignificantsocialcosts,regulatorshaveaspecialresponsibilitytowardsmaintainingtheirsolvency,evenprovidingthemwithsomeformofsubsidies.Inacompletelyfreemarketsystem,itispossiblethatbankslocatedinsparselypopulatedareasmayhavetopayextremelyhighpremiumstocompensateforalackofdiversificationorinvestmentopportunities.Suchbanksmayhavetoclosedownunlesssubsidizedbytheregulators.Thus,astrictlyrisk-basedinsurancesystemmaynotbecompatiblewithatrulycompetitivebankingsystem.
7.Whatarethreesuggestedwaysinwhichadepositinsurancecontractcouldbestructuredtoreducemoralhazardbehavior?
Depositinsurancecontractscouldbestructuredtoreducemoralhazardbehaviorby
(1)increasingstockholderdiscipline,
(2)increasingdepositordiscipline,and(3)increasingregulatordiscipline.
8.Whataresomewaysofimposingstockholderdisciplinetopreventthemfromengaginginexcessiverisktaking?
Twowaysofimposingstockholderdisciplinetopreventexcessiverisktakingare(a)througharisk-baseddepositinsuranceprogram,and(b)throughincreasedcapitalrequirementsandincreaseddisclosure.
Risk-baseddepositinsurancepremiumsensurethatbanksengaginginriskieractivitieswillhavetopayhigherpremiums.OnereasonfortheS&Lcrisishasbeenthefixed-ratedepositinsurancepremiumsthatdidnotdifferentiatebetweenriskyandconservativebanks.Asaresult,stockholdersofFIsinfinancialdifficultieshadnothingtolosebyinvestinginprojectsthathadhighpayoffsbecausedepositorswereprotectedbytheFDICinsuranceprogram.
Stockholderdisciplinealsoisincreasedifbanksarerequiredtoholdmorecapitalaswellasrequiringmorefinancialdisclosures.Themorecapitalabankhas,thelesslikelythefailureofabankintheeventofadeclineinthemarketvalueofassets.ThisprotectsnotonlythedepositorsbutalsotheFDIC,whichprovidestheinsurance.Greaterdisclosurealsoallowsregulatorsandoutsideanalyststomakemoreinformedjudgmentsontheviabilityoftheinstitution,raisingthestockpricesofbetter-managedFIsandloweringthestockpricesofthosethatareexcessivelyrisky.
9.HowistheprovisionofdepositinsurancebytheFDICsimilartotheFDICwritingaputoptionontheassetsofaDIthatbuystheinsurance?
Whattwofactorsdrivethepremiumoftheoption?
AslongastheDIisprofitable,theownersoftheDIbenefitbymaintainingapositivemarketvalueofequity.IftheDI’sperformancefalterssufficientthatnetworthbecomesnegative,theownerscanputtheassetsbacktotheFDICwhowillpayofftheinsureddepositorsandselltheassets.Thepremiumonthisputoption,ordepositinsurance,ispositivelyrelatedtothelevelofriskoftheassetsandtotheamountofleveragemaintainedbytheDI.
10.Whatiscapitalforbearance?
Howdoesapolicyofforbearancepotentiallyincreasethecostsoffinancialdistresstotheinsurancefundaswellasthestockholders?
Capitalforbearancereferstoregulators’permittinganFIwithdepletedcapitaltocontinueoperations.Theprimaryadvantageoccursintheshortrunthroughthesavingsofliquidationcosts.Inthelongerrun,thelikelycostisthatthepoorlymanagedFIwillbecomelarger,morerisky,butnomoresolvent.Eventuallyevenlargerliquidationcostsmustbeincurred.
11.Underwhatconditionsmaytheimplementationofminimumcapitalguidelines,eitherrisk-basedornon-risk-based,failtoimposestockholderdisciplineasdesiredbytheregulators?
Regulatorsmustbewillingtoenforceimmediatelycorrectiveactionprovisionsagainstbanksthatviolatetheminimumcapitalguidelines.
12.WhatfourfactorswereprovidedbyFDICIAasguidelinestoassisttheFDICintheestablishmentofrisk-baseddepositinsurancepremiums?
Whathashappenedtothelevelofdepositinsurancepremiumssincetherisk-basedprogramwasimplementedin1993?
Why?
TheFDICmustbasedepositinsurancepremiumson
(1)differentcategoriesandconcentrationsofassets,
(2)differentcategoriesandconcentrationsofliabilities,(3)otherfactorsthataffecttheprobabilityofloss,and(4)therevenueneedsoftheinsurer.Inmostcasestherankingofaninstitutionisbasedonregulators’judgementsregardingassetquality,loanunderwritingstandards,andotheroperatingrisks.Astheindustryriskprofilehasimprovedand
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- 金融机构 管理 习题 答案 019