Working Paper
Depositor preference and the cost of capital for insured depository institutions
Abstract: An analysis of the impact of depositor preference laws on the cost of debt capital for banks and on the value of FDIC deposit guarantees. The authors find that depositor preference laws increase the value of uninsured deposit claims and reduce the size of the FDIC subsidy, but will not affect the total value of banks and thrifts unless deposit insurance is mispriced.
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Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers (Old Series)
Publication Date: 1994
Number: 9404