We study the consequences and optimal design of bank deposit insurance and reinsurance in a general equilibrium setting. The model involves two production sectors, financed by bonds and bank loans, respectively. Financial intermediation by banks is required in the model as we assume that one of the production sectors is risky and requires monitoring by banks. Households fund banks through deposits and equity. Deposits are explicitly insured and banks pay a premium per unit of deposits. Any remaining shortfall is implicitly guaranteed by the government. Two types of equilibria emerge: One type of equilibria supports the Pareto optimal allocation. In the other type, bank lending and the default risk are excessively large. The intuition is as follows: the combination of financial intermediation by banks, limited liability of bank shareholders, and deposit insurance makes deposits risk-free from the individual households’ perspective, although they involve risk from the societal point of view. This distorts investment choices and the resulting input allocation to production sectors. We show, however, that a judicious combination of deposit insurance and reinsurance eliminates all non-optimal equilibrium allocations. Our paper thus may provide a benchmark result for policy proposals advocating deposit insurance cum reinsurance.

我们研究了一般均衡环境下银行存款保险和再保险的后果和优化设计。该模型涉及两个生产部门，分别由债券和银行贷款提供资金。模型中需要银行进行金融中介，因为我们假设生产部门之一是有风险的，需要银行进行监控。家庭通过存款和股权为银行提供资金。存款有明确的保险，银行为每单位存款支付保费。任何剩余的短缺都由政府隐含地保证。出现两种类型的均衡： 一种类型的均衡支持帕累托最优分配。在另一类中，银行放贷和违约风险过大。直觉是这样的：银行金融中介、银行股东有限责任、存款保险从个体家庭的角度来看使存款没有风险，尽管从社会的角度来看它们涉及风险。这扭曲了投资选择和由此产生的对生产部门的投入分配。然而，我们表明，存款保险和再保险的明智组合消除了所有非最佳均衡分配。因此，我们的论文可为提倡存款保险兼再保险的政策建议提供一个基准结果。存款保险和再保险的明智组合消除了所有非最优均衡分配。因此，我们的论文可为提倡存款保险兼再保险的政策建议提供一个基准结果。存款保险和再保险的明智组合消除了所有非最优均衡分配。因此，我们的论文可为提倡存款保险兼再保险的政策建议提供一个基准结果。